Michele Carby Investigates: Accessing your Pension Freedom Cash

Pension Freedom is finally a reality, and the good news is that it hasn’t altered much since it was first announced last year. This post looks at how you can access Pension Freedom and advice for those locked into final salary schemes. Final Salary Pension Holder and Under 55 (Private Sector Scheme Members) If this applies to you and you want more control over your money, the time to act is now. Contact your scheme managers and ask for a transfer value figure. This is the amount of money you’ll be transferring to a direct contribution pension. The options here are extensive, and it is easy to make a mistake. Do you go for an ‘old-style’ pension or a self-invested personal pension (Sipp)?  Are you aware of the tax rules concerning Pension Freedom? Did you know that not all direct contribution schemes facilitate Pension Freedom? Over 55? If you are over 55, you can still transfer your money to Pension Freedom friendly scheme, again understanding the details are vital. Before you do anything contact a good financial adviser. It will stop you buying an unsuitable product. Public Sector Final Salary Pension Scheme Holders If you are in this type of pension scheme will not be able to transfer your pension to a Pension Freedom friendly scheme. This is because they are funded by general taxation and as such, you do not have a pot of money behind you as in other schemes. Defined Contribution Pension Scheme Holders Aged less than 55 Although defined contribution schemes are eligible for Pension Freedom, not every pension provider is offering it. This means that you will be locked into an old-style annuity scheme. Your options here are to wait until you’re close to age 55 to find a pension provider who adheres to Pension Freedom or transfer your pension now. Again, solid financial advice will be needed to make a decision of this kind as everyone’s circumstances are unique. Personal Pension Scheme Holders Aged less than 55 In many respects, you are faced with the same decisions that apply to defined contribution holders. Personal pensions are either administered in conjunction with your employer, or an outside firm whom your employer has contracted. Some are just contracts between you and a pension provider. Either way, the choices are exactly the same as defined contribution holders. Do you transfer now if your provider is not offering the flexibility of Pension Freedom, or do you wait to nearer your retirement? Again good pension advice is worth its weight in gold. Aged Over 55 and in a Personal Pension or Defined Contribution Pension Scheme? Providing you have a provider who adheres to Pension Freedom you are now in the driving seat. If you do not and like the idea of having full control over your retirement funds, then you may want to switch provider by transferring your pot to a Pension Freedom friendly administrator. Either way, you will need expert retirement planning advice.  My award-winning services explain every detail to you on retirement planning, especially where Pension Freedom is concerned.  Together we can find the right pension scheme for you. For more information, please fill in the below form, or click here to find out more about me. 

Ready to chat with
a specialist?

Get started

You may also be interested in

Behavioural finance

Behavioural finance: the psychology of investing

Behavioural finance theory suggests we make decisions based on emotions rather than logic. Understanding it could help you make better investment decisions

Read more
The benefits of a financial second opinion

5 benefits of a financial second opinion

In this article, we explore the five key benefits of a financial second opinion and why a fresh perspective could be just what you need.

Read more
questions to ask a financial adviser

7 Questions to ask a financial adviser

We look at the key questions you should ask a financial adviser before hiring them and one important question you need to ask yourself.

Read more
Time is running out to top up your UK State Pension

Time is running out to top up your State Pension

Time is running out to top up your State Pension. Here is everything you need to now about State Pension top-ups.

Read more