Are you thinking about cashing in your pension savings? Before you do, it’s important that you first consider the consequences.
It’s vital that you:
- talk to your pension provider to find out the options available to you
- make sure you get independent advice - you can get more information from the Money Advice Service, and if you need to talk to someone, contact The Pensions Advisory Service
- remember that while you can take the first 25% of your pension pot tax free, you'll get charged income tax on any additional money you take, and you may also need to consider the impact on your eligibility to state benefits or care services
- think about your long-term plans - you’ll be able to make better decisions about your pension if you've thought about what you want from retirement
- be aware of pension scams - a cold caller may contact you to give you pension advice, saying they have your details and have Government backing. It’s best to hang up or ask them to leave as this is likely to be a scam.
Annuities have had some bad press, as fees can be high, but they may still be the most sensible option for many people.