Pension Release and Pension Unlocking
Cash In Pension
In the current difficult economic state that we will find ourselves in, people sometimes find it difficult to raise money and capital by a traditional routes. Thanks traditional lending institutions are making it more difficult to borrow money and many people find themselves in the position of having exhausted all of their normal routes of raising cash.
One route, which is open to those of us who are aged between 55 and 64 is pension release all pension unlocking is it sometimes called. This is simply a method of releasing cash from your pension early before you reach retirement age. In the UK. If you have a private or personal pension which you are not receiving benefits from, you may be able to release as much as 25% early. What's more, this money is almost tax-free.
You can of course carry on working and making contributions into your pension fund. You don't have to take the full 25% straightaway and you can take this later on.
There are considerations which you should bear in mind, if you release money from your pension at an earlier stage then you will inevitably receive less later on. For this reason the pension release should only be used if you have truly exhausted all your other means of raising the capital. This area of finances also very heavily regulated by the financial services authority.
There are specialised companies that deal in pension release schemes, but if you are considering this route then I would suggest dealing with the company who deals solely in pension release. The chances are that you require the money quickly and the pension release specialist will be able to get the money from your pension in as little as 20 days (sometimes it can take longer). This is completely dependent on how complicated your circumstances are. You will be asked to fill out a couple of forms by your adviser, these will enable him to get the relevant information from your pension plan company. Your adviser should also give you unbiased advice as to whether unlocking money from your pension early is a good idea. He will cover all of the aspects and will also look into other ways of raising money before proceeding.
Most financial advisers offer a free and no obligation review of your current pension. There may be charges and penalties for carrying out the pension release, so make sure you're aware of the facts before you proceed. There may also be some impact on any state benefits you are receiving, so again, make sure that you are fully aware of all the facts before you proceed.
Reasons why you might want to release money from your pension early:
Pay off credit card debt
Pay off mortgages
Helping children get onto the property ladder
Reinvesting the money in order to get a better return than you would get from the pension.
The money can be used for anything you want. It's your money, after all.
Pension release and pension unlocking is becoming a more common way of people raising cash to combat the credit crunch. If this is something you are considering, then always take professional advice. You should never feel obligated to go ahead and you should never be pushed into this by a pushy salesmen.
Remember, taking money early from your pension will mean that there is less in the pot for later on. For this reason, make sure that you weigh up all of your options. Pension release should certainly not be seen as an easy option of getting money quickly.
Cash In Pension