People consider unlocking their pension for a number of different reasons: they may have debt repayments, mortage arrears or they may wish to release cash to pay for a wedding or a dream holiday or cruise.
Here in this article we give commentary on some of the advantages of pension release.
1/ It frees up money earlier in life rather than waiting until you are 65 – There are countless people in society who would benefit from an early release of their pension (over 55), to be able to access their pension 10 years earlier than originally planned, in the general sense is very appealing to people for a whole range of reasons.
2/ Enables people to reinvest their pension in property – Property is known by most investors as one of the safest investments you can make, with UK property prices in something of a “boom” at present this is one of the smartest things a UK citizen or investor can do with their pension
3/ It enables people whom are experiencing short or long term financial challenges to repay their debts more quickly through the release of funds tied up in their pension, this can be a range of different costs, mortgage arrears, personal tax liabilities, general debts, basically any kind of debt that could be ameliorated through pension release & subsequent debt repayment.
4/ It enables people to experience the finer things in life whilst 10 years younger, it can make that dream holiday a reality, it can make that two storey home extension viable, or that purchase of a new home altogether, the possibilities are many and varied.
5/ It can pay for their childrens’ education, with university fees on the rise and the costs associated with going to university, this can be helpful, (not to mention fees for driving lessons, and that inevitable first car!)
All in all there are a range of advantages to having cash available earlier (before full retirement).
It’s also possible to continue contributions into a pension once you’re withdrawing money out of that pension, meaning that you can still apportion earnings into your pension whilst withdrawing money from that pension.
If you wish to proceed with unlocking your pension, you will need to find a reputable pension release company to help facilitate this for you.
It is possible to release around 25% of your pension in a tax free lump sum, this makes it even more attractive for people looking to release funds quickly.
One of the only factors that may deter people from releasing money from their pension is the fact that in order to do this legally and in the conventional sense (i.e not taking a loan against their pension) is for them to fit one of the following criteria:
1/ They must be over the age of 55
2/ They must be in ill health
One of these two criterion’s’ need to be fulfilled in order for a pension to legally be released to a UK resident.