FROM APRIL 2015 IF YOU ARE AGED 55 PLUS AND HAVE A PENSION WHICH IS EITHER 
 
A PERSONAL PENSION 
OR HAVE A WORK PLACED PENSION NOT LINKED TO A FINAL SALARY 
 
(BETTER KNOW AS A DEFINED CONTRIBUTION PENSION (DCP)) 
 
THEN YOU WILL HAVE AN OPTION TO TAP INTO AND WITHDRAW A CASH LUMP SUM AGAINST YOUR PENSION. 
IS THIS WISE? 
 
WHILST THIS MAY SEEM LIKE AN ATTRACTIVE PROPOSITION PARTICULARLY IF YOU ARE CASH STRUCK, THERE ARE MANY THINGS TO CONSIDER BEFORE DOING SO. 
 
IF YOU TAKE OUT THE ENTIRE CASH LUMP SUM, ONLY 25% OF THIS WILL BE TAX FREE, MEANING THAT THE OTHER 75% IS SUBJECT TO INCOME TAX. SO WHAT MIGHT SEEM LIKE A GOOD DEAL, AFTER TAX, COULD BE NEGLEGABLE. 
DO YOU HAVE SUFFICIENT FUNDS TO CONTINUE LIVING ON SHOULD YOU SURVIVE FOR ANOTHER 10, 20, 30 YEARS? WHAT IS YOUR PLAN B? 
WHAT DO YOU DO WITH YOUR CASH ONCE YOU HAVE TAKEN IT OUT? 
ALTHOUGH PAYING OFF A MORTGAGE OR DEBT WILL PROVIDE SHORT TERM RELEIEF, IT MAY NOT BENEFIT YOU LONG TERM 
PUTTING IT INTO AN NSI OR ISA (WHICH HAS RISEN TO £15,000 ) INTEREST RATES ARE STILL NOT VERY FAVORABLE 
INVESTING INTO OTHER SCHEMES / STOCKS OR SHARES IS ALWAYS A GAMBLE AND YOU COULD END UP LOSING MORE THAN IF YOU HAD LEFT YOUR PENSION ALONE 
 
ALTHOUGH INDIVIDUALS ON A FINAL SALARY PENSION COULD TRANSFER TO A DEFINED CONTRIBUTION PENSION BEFORE THEY TURN 55 TO BECOME ELIGIBLE, THIS ACTION REALLY SHOULDN’T BE TAKEN WITHOUT SEEKING THE ADVICE OF AN INDEPENDENT FINANCIAL ADVISOR. 
 
INDIVIDUALS ALREADY COLLECTING PENSION PAYMENTS CANNOT BENEFIT FROM THIS CASH INCENTIVE. 
 
SOME OLDER PENSIONS MAY HAVE EXIT FEES TO PAY REDUCING YOUR CASH SUM EVEN FURHTER. 
 
ADVICE 
 
OF COURSE YOU CAN SIMPLY LEAVE YOUR PENSION AS IT IS, BUT BEFORE YOU ACT OR THINK ABOUT WITHDRAWING ANY CASH, IF TEMPTED BY ATTRACTIVE ADVERTISNG, THEN SIMPLY ENSURE YOU SEEK SOUND ADVICE FROM AN INDEPENDENT FINANCIAL ADVISOR WHO WILL LOOK AT YOUR FINANCES FOR YOU AS A WHOLE AND LOOK AT THE LONG TERM BIGGER PICTURE. 
 
WHILST FREE AND IMPARTICIAL ADVICE WILL BE GIVEN BY THE PENSIONS OR MONEYTARY ADVICE SERVICE THEY ARE NOT ACCREDITED AND MAY NOT PROVIDE THE BEST COURSE OF ACTION. 
 
IF YOU NEED HELP FINDING AN INDEPENDENT FINANCIAL ADVISOR OR FURTHER ADVISE ON PENSIONS PLEASE GIVE ME A CALL SO I CAN HELP POINT YOU IN THE RIGHT DIRECTION. 
 
NEXT TIME: WHAT AGE WILL YOU QUALIFY FOR YOUR STATE PENSION? FLEXIBLE WORKING HOURS? 
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