Pensions Release: Commonly Asked Questions
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On our receipt of your signed letter of authority it normally takes between 4 to 5 weeks. However this is dependent on your existing pension provider giving us all the necessary information. Some providers are quicker than others so you could have your cash within 3 weeks in some cases.
Accessing money from your pension earlier than your normal retirement age is known as unlocking your pension or pension release. Money can be released both from personal pensions and company pensions. Pension release is unsuitable for the majority of people as taking money from your pension now will result in a smaller income when you come to retirement. However there are numerous reasons why many people do release cash. The major UK product providers have designed modern, sophisticated, flexible and low-charged products for this growing market.
To gain access and release money from your previous or existing pension it usually has to be transferred into a new scheme with one of the major UK providers. Once the money is transferred to the new pension provider the amount of tax free cash is calculated and paid direct to your nominated bank account. The remaining fund will then remain invested until retirement or, if required, under the new Pension Freedom & Choice Rules you can access your entire pension fund if required.
Current rules allow you to release a cash lump sum of up to 25% of the value of your accumulated pension funds. This is tax free and is know as a Pension Commencement Lump Sum.
It is possible to release less than the maximum 25% and draw more later. You can also continue to contribute to your pension, which will build up more tax free cash for the future. Alternatively under the new Pension Freedom & Choice Rules you can access your entire pension fund if required!
If you want to explore whether you are eligible for pension release then:
- Complete the online enquiryt form section on the home page to confirm you are eligible
- If you are eligible complete the enquiry informtion
- Print off and send us the completed ‘letter of authority’. These are pre-populated from your information input
- We will do the rest!
Once we receive the letter of authority we will contact your pension provider and obtain the current fund and transfer values of your pension funds. We analyse this information and send you a comprehensive report, which contains information on how much cash you are able to release.
To complete the process and obtain your tax free cash you will need to complete discharge forms issued by your current pension provider and a simple application form. Once these have been completed you should receive your cash in 3 to 4 weeks time.
There is no charge for the work carried out up to issuing your report. Our terms of business which you will need to accept going through the information gathering stage sets out how and when we are paid. The new pension provider will release your tax free cash and from the remaining fund will pay us a fee dependent on the size of your pension fund. This is only paid on completion of the transfer and cash release process.
No. Our entire process is conducted online, email and via post.
No. The money is already invested in your pension. You are simply accessing it now rather than when you retire. There are a number of web sites offering a loan of up to 50% of your pension value. These are not recognised UK financial products. You are expected to sign over your pension rights which will then go to the lender on death. Clearly it is not advisable to do this as you will receive no income at retirement!
Up to 25% of your pension can be released totally free of income or capital gains tax, even if you are a higher rate tax payer.
No. You are not able to sell your pension fund. Pension release is a way of accessing money which is already yours prior to your normal retirement date.
No. You can continue to work, and even continue to contribute to the pension arrangement. However you will not be able to release money from your current employer’s pension scheme.
I still have questions!
If there are any further questions you would like to ask please contact us and we will reply to any questions or queries you might have.