Cashing in on a pension

[gordonsanderson]

Hi All,

I would like to know if it is possible to cash in on a pension scheme that i have been paying for 19 years, or am i able to sell it on?

 

Any pointers in the right direction would be well recieved.

 

Regards Gordon

[Conniff]

I don't know how old you are Gordon, but think very very carefully about cashing in any pension if at all possible.

What can appear to be a solution to a short term problem you may be having now, can turn and bite you on the bum in later years.

 

The state pension does not give a lot, and certainly not enough to live on if you have any debts or rent to pay as well.

 

You can't go back in time and start one once you reach retirement age finding that you now only have the state pension to live on.

 

Only those who have finished paying a mortgage and now live rent free can really survive on a state pension.

 

If you really need to cash in a pension, make sure you take advice from an 'Independent Financial Advisor' before you make that final 'important' and potentially life changing decision. It cost nothing to get advice, but make sure you ask for 'advice' and not just information, there is a difference.

 

I believe that you get more from a purchase company than by cashing it in with the company running it.

[DoryDory]

Hi Gordon, Conniff is right. Think very carefully about cashing in your pension as you will need it later in life and the state pension is only pennies.

 

That said depending on your age, pension type and circumstances there are options available to you.

 

I believe the minimum age to receive a Tax Free Cash lump sum is 50 but the legislation may have changed, as it has been around 3 years since I worked in this area, and it again, depends on the type of pension you have.

 

An Independent Financial Advisor is definitely the best way to go as they will provide you with the best solution to your financial circumstances. They tend to work on one of two basis'. Either they provide the advice for free and will take a commission from the pension/insurance company when work is performed (with no fee payable if you decide to do nothing) or they will charge a fee on a time spent basis.

 

The latter is obviously the best way to ensure their impartiality, but few of us can afford the fees!

 

There are some good IFA's based in London that I have worked for in the past that I could refer you to as a starting point if you would like.

 

Now, there are other companies around who deal only in pensions, and specifically in "cashing them in". You can obtain free information AND advice from them on what is available to you, and they are legally obligated to advise you when proceeding down this route is not the best option for you, but I am sure that this does not always happen.

 

I can, again, give you the name of a reputable firm based in Kent (I used to work for them) who were the only company to not receive a fine and receive a "clean bill of health" during an audit performed by the FSA (Financial Ombudsman) at the time. I don't want to post full details here in case I am breaking any forum rules etc.

 

But be warned, it can be a very lengthy process (2-3 months), and remember that it is not the best solution to a short term problem as you will be leaving holes in your finances during your retirement that you may not be able to make up.