Pension release, also known as pension unlocking, is the act of taking money out of your pension before you retire. If you are over the age of 55, you can legally complete this process, but if you are not, then in most cases you will have to be in very poor health in order to do so.
Before going through with this, you should make sure you have thought long and hard about your decision. When you take money out of your pension early you will not get as much money as you would have if you had left it alone. You also have to make sure that you are going to have enough money to last you once you finally do retire. Ask yourself the following questions to see if using a pension release is right for you:
- What would the income difference be between getting my money now and getting it after I retire?
- Would the reduced future income be enough to support my needs?
- Do I really need the extra money right now, or do I have other options?
- Do I lose any benefits by going through with a pension release?
- Are there any penalties that I would need to pay in order to unlock my pension?
- Are there any ongoing charges that I need to know about?
- What are my other options?
Asking yourself questions like these is essential before getting a pension release. You don’t want to go through with it and end up regretting it a few years later. If you are unsure, ask for some advice. There are services out there that can help you to make the right decision based on your circumstances. Ask them a lot of questions and be sure you know all of the details involved in getting your pension unlocked before you do so. While it is the right decision for some people, it is certainly not right for everyone.