Pension Lump Sum
What exactly is a pension lump sum?
A pension lump sum is a way of getting cash from your pension in a single payment. There are numerous criteria that effect exactly how much your pension lump sum can be. Some of these factors include:
· Your age – as a general rule you have to be over 55
· Your personal health circumstances. If you are in poor health you may be able to access your cash more easily than if you are in good health.
· The total amount of money in your pension fund
· Latest HMRC treasury rules
Unless you are an expert in personal pensions you should consider getting professional advice on the options available to you. You may be able to get this advice for free from many institutions. More information on independent advice can be found at the Financial Services Authority (FSA).
Whilst for some the pension lump sum can be sufficient for their needs others may require a larger pension lump sum. For some this can be very difficult to achieve. The pension fund managers may take a very dim view of you drawing funds from your pension. Indeed some say that it cannot be achieved without the possibilities of incurring sky-high charges and attracting an enormous tax liability.
Is there another way of getting cash from your pension?
The real truth of the matter is that there are tried and tested methodologies in the market place that can enable you to draw up to a full 90% of your pension as a lump sum. Whilst every case is almost unique it is beyond the scope of this article to explain the full process in detail. However, by completing the form at the top of the page you can begin the process of exploring just how much of your pension can be drawn as a pension lump sum.
Some of the highlights of this methodology is that there are NO age restrictions. There are NO credit checks. The process is fully HMRC compliant. It is, quite probably, one of the most tax efficient and most effective way to get cash from your pension. Find out more by filling in the form.
What are the risks?
There are, without doubt, numerous risks associated with drawing a lump sum from your pension. Possibly the most obvious being that the more you draw from your pension the less will be available to pay you when you retire.
Further, if you are not very careful, you can be paying tax upon the lump sum that you draw from your pension. By completing the form you can begin to explore other options.
Whilst the above is all very true it does not go on to address any financial hardships that you may be experiencing right now. With job losses being announced what seems to be almost daily. With banks appearing to making getting a loan even more difficult. With recessionary pressures seemingly building within the economy. With house re-possessions probably on the increase. Then, for some, drawing a pension lump sum can be the only source of funding. After all isn’t it better to entire retirement debt free?
What can you use the money for?
The cash in your pension as a lump sum can be put to any purpose you desire. For example you may have been looking at your pension and thought “I could make that money work harder”. You may have your own financial vehicle that you want to invest your money into. Then drawing your lump sum you can do so.
You might have a credit card bill that you cannot pay off. Then you can draw from your pension and clear your debts.
You might have the HMRC knocking at your door for a tax bill that you simply cannot pay. Then a pension lump sum can be yours.
You could use the lump sum to assist your child through University.
If you run a business where you have a cash flow problem then a pension lump sum could just be the lifeline you require. The really great news here is that once this financial hurdle has been over come you could then re-invest back into your pension.
This can be one of the real keys behind drawing a lump sum from your pension is that you will not be questioned on why you want the money. Unlike a bank loan where you may have to jump through several ‘hoops’ no such questions may be asked about your pension lump sum.
Beware the ‘Nay-Sayers’
There is absolutely no doubt in the fact that if you draw money from your pension early then there will be less money left in your pension to pay for your retirement. This is a fact.
However, it is advisable to take a look at the vested interests of those you consult. A pension funds manager might strongly advise you that withdrawing your funds is not in your best interest. But then they would wouldn’t they?
An Independent Financial Advisor or Accountant may take the view that it is not possible to draw a pension lump sum as cash in your pension. However, the market place form drawing cash from your pension is highly complex and they may, or may not, be in possession of all the facts and figures.
What is certainly true is that all these people have differing vested interests. They may not see the financial ‘tiger’ tip tapping at your door. They might not care that your house is about to be repossessed. A pension lump sum might just be the financial life-line that you’re looking for.
After all ….
When done and said all this is your money. You’ve saved this money – it just happens that the vehicle you’ve chosen is a pension fund. You’ve worked hard. You’ve probably paid your taxes on this investment. You should have your right to draw on these funds if you so wish. By completing the form at the top of the page you’ll be eligible for a FREE consultation. Surely being ‘forewarned is being forearmed’. Make sure your ‘armoury’ is as complete as possible. Complete the form today.
written by Martin Smith