I have a government pension. Can this be released?

It is possible to access money from some types of government pension schemes. With the support of a financial adviser you can check if yours is eligible and understand if it’s right for you.

The quick and easy guide to government pensions

Pensions can be very confusing at the best of time, even more so when trying to understand government pensions. Some types of government pension are eligible for release, but not all of them. The first thing you need to do is to understand what type of scheme that you have.

There are two distinct schemes and which one you have will be dependent on the kind of work you do. Generally, if you work for the council you will have a Local Government Pension Scheme. These types of pension are known as LGPS and in most cases can be accessed at the age of 55 through  a process of pension transfer. If you work within the public sector (teacher, nurse, doctor, police force, military etc.) you will have an “Unfunded” pension scheme.  Unfortunately, these schemes can no longer be transferred since new legislation in 2015.

 If you are unsure which scheme you have, give us a call on Freephone 0800 034 7288 and we can help you find out.

Accessing a local government pension scheme

If you have an LGPS in most cases you can release money before retirement. Accessing savings from an LGPS generally cannot be done directly as you would with a personal pension or a company pension, so this guide will walk you through how you can access your savings and the key factors to take into consideration.

The headline facts at a glance

Over the last 2 years “Pension Release” has become very popular.  However, people are being advised that the only way they can access this benefit if you have a LGPS is by transferring your savings to a personal pension. On one level the process is quite straight-forward. But an LGPS is an excellent pension with benefits which should not be dismissed without thorough assessment and expert advice. So a regulated financial adviser is highly recommended to help you remain financially secure and find the best solution.

What is pension release?

Pension Release has been available for many years but it was particularly brought to the general public’s attention in 2015 when it was highlighted in the government’s “Pension Freedoms”. Basically, it allows people the opportunity to access money they have saved in their pension from the age of 55 - a really handy facility to fall back in some instances on when you are in need of a small lump sum to see you through difficult times.

Legally you are allowed to take as much money from your pension pot as you wish, but only the first 25% will be tax-free. However, you do not have to take the money in one go – you can release lump sums over whatever period you like. The remainder of the money within your pension fund will still be invested and continue to grow.

Why do I have to move my pension to gain the benefits of pension release?

Pension Release was designed as a feature of “personal pensions”. Your LGPS on the other hand, is classed as a “final salary scheme” (it offers a guaranteed income at retirement) so you cannot generally therefore take money from it before the scheme retirement age. To take advantage of Pension Release you would need to transfer your fund (pension switch) to a personal pension.

As LGPS comes with many attractive features of its own, it is essential that the benefits you may be gaining from a new pension scheme are thoroughly weighed up against the features you may be sacrificing.  Therefore, it’s important to seek a regulated financial adviser who will put your future needs and aspirations at the heart of the assessment while helping you to navigate the process, explain the best financial options and highlight the most effective road ahead.

How do I get information around starting the process?

At Portafina, we offer a no obligation pension review. This means that we will gather all the information required and provide you with all of the options available to you along with our recommendation. Sometimes accessing your pension might not be the right thing to do and if so, our adviser will clearly explain the options open to you.

To get started, simply request our free information guide. We will pop one in the post for you with a form to complete. Simply complete the form and post back to us in the pre-paid envelope and we’ll get on the case.

Request your information packRequest your free information guide

Our free information pack will help you navigate your way through releasing tax-free cash from a LGPS. Complete the quick and easy enquiry form we have enclosed and we will send you all you need to know about taking the next step. We will also let you know how our no obligation guidance and advice works and how to take advantage of it.

More information…

Hopefully this quick guide has given you a useful insight into how you can access savings from your LGPS. For further information on the topic take a look at three of our most frequently asked questions below. If you cannot find what you are looking for please do not hesitate to give us a call on 0800 304 7288

 Will the advice cost me?

In order to offer the most effective advice, we will review your situation, including your pension provision and personal circumstances. Our view is that people shouldn’t have to pay to receive expert advice on what to do with their pension. So there would  be nothing to pay unless you ask us to act upon our recommendations.

Is taking money from your pension the right thing for you to do?

To answer this question, you first need to balance the importance of what you currently need with what you might need in the future. Taking money from your pension now could reduce your income and therefore affect the way you live your life when it is time to retire. On the flip slide, for many people considering this option, resolving their current need can have a lasting positive impact on their future. It is not an easy decision to make especially as final salary schemes provide valuable guarantees which would be lost upon transfer. And that is why many people seek advice from a regulated, independent financial adviser, someone who knows pensions inside out and who will do all the hard work for you.

How will your pension be managed over time?

It is likely that your circumstances and goals will change over time. This is why it is important that your pension is reviewed at least once a year, so that it is always tailored to suit where you are at in life. It’s not worth settling for advice that promises grand changes in the short term but cannot back this up with thorough ongoing management of your pension.

Call 0800 304 7288 for a friendly chat about your pension

Stephen's pension documentary

Stephen finished his documentary

Documentary-maker Stephen took money from his pension to complete his long-in-the-making documentary “After ‘82”, which explores the history of the AIDS crisis in the UK. Click the link to watch Stephen's story.


Watch the video

Alan's pension release story

Pension cash enabled Alan to clear debts

Alan had credit cards charging high rates of interest. Taking some tax-free cash from one of his pensions allowed Alan to clear the cards, and the rest remained invested for the future. Click the link below to watch Alan's story.


Watch the video

Finding Mark's pension

Finding old pensions changed Mark’s future

Mark wanted us to find his pensions from previous jobs. Tracking them down gave him almost £20,000 more for the future. We then combined them into a single pension fund, giving more control than before. Click the link below to watch Mark's story.


Watch the video

Frequently asked questions

Back to top