Can a Pension Loan give access to the funds in your pension?
For some people a pension loan can be the ideal way to release the funds from your pension. Generally, to qualify for a pension loan, you don’t have to ‘jump through the hoops’ the same way you do as for a traditional loan.
This means that there might be no credit checks. No invasive questions into your current financial situation.
However, there might be other ways to release the funds from your pension.
It might be possible to gain access to the funds in your pension in other ways. One methodology some people have used to gain access to their pension is via pension release. Some may say that pension release is only possible if you’re over the age of 55. However, for many this is not the case.
For example: if you’re under 55 years of age and have a pension fund in excess of £50,000 it is very possible that you can release as much as 85% of the funds in your pension straight into your bank account. Money that you can spend in any way you like.
Find out if you qualify. Do what the majority of people who read this site do simply fill in the form at the top of the page. It could be the first step in your journey to getting access to the funds that you need.
What about the tax?
Certainly by looking to release the funds in your pension early then it is possible that the HMRC might be interested in your actions. It is not unknown for the HMRC to send you a hefty tax bill for releasing your pension funds early. And what could be more depressing than thinking you’ve got yourself a nice little nest egg only for it to be snatched away from you?
But there is some good news. By utilizing the right pension release programme it is possible that you can keep the majority of the funds to yourself. Certainly this is true if your pension fund is over £50,000. If this is you then complete the form at the top of the page – this will start your journey without obligation.
Why are people cashing in their pension?
The reasons people are keen to get at their pension funds early are individual as the people who apply for them.
For some people they are facing financial ruin right now – things like job loss, credit card bills, or even hefty tax bills that they cannot afford. Having a nice pension pot might be great for when they retire but if they can’t afford to live right now then what is the point?
Some are possibly watching the performance of their pensions and think “I could do better myself”. In this instance they are, perhaps, taking the money from their pensions and investing it in a vehicle that they think will out perform their existing pension fund.
Others might be watching what is happening in the financial sector. The banks losing money seemingly hand over fist. They might be thinking that their pension fund might be caught up in the process and, when it comes to withdrawing it, the funds simply won’t be there.
Whilst others are probably looking at the performance of the annuity market and consider that the traditional pension market simply isn’t producing results.
Whatever the reasons many people, just like you, are looking at withdrawing the funds from their pension.
What might happen if I cash in my pension early?
As mentioned above the HMRC might be interested in your actions. When you do come to retire you might find that you don’t have enough money to live on because you took your money out early. Certainly it will be a good idea to consult an Independent Financial Adviser (IFA) these people maybe able to help you access funds that you previously thought were unavailable.
Certainly if you do have pension funds available AND access them in the most prudent way then you’ll have the funds in your bank to use as you wish.
What can I spend the money on?
The short answer is anything you like! It will be your money to use as you wish.
How long does the process of gaining access to the funds take?
Once you’ve agreed to the process and returned all the relevant paperwork then it can take anything from between 3 and 6 months for the final payment to reach you. Why does it take so long? There are various legal steps that need to be taken before you can get your money that’s why it can take so long.
Certainly, if speed of access to your funds is important to you, then you can take your first steps right now by filling in the form at the top of the page. That way you can begin the process.
written by Martin Smith