Pension Release from 55

Thousands now use tax-free money from their pensions to change something in their lives long before they retire. Find out what pension release could mean for you.

What is pension release?

Pension release means taking money early from your pension. You might also have come across the phrase pension access or pension unlocking; it means exactly the same thing.

Early is pretty vague, can I take this money any time I like?

As a rule of thumb you must be aged 55 or over to take money from your pension. In exceptional circumstances, including extremely poor health, you may be able to access your money before you are 55.

So, how much can I take?

As long as you have an eligible scheme you can take as much or as little money as you like from your pension. The first 25% of your pension is tax free, although you might have to pay tax on anything above that amount.

How do I know if I have an eligible scheme, and what’s this talk about tax?

All private pensions are eligible, as are most employee schemes. If you have what is known as a final salary scheme with your employer then you may need to transfer this to a private pension before you can take any money. It’s wise to think very carefully before doing this as you could be giving up guaranteed benefits when you retire.

You cannot use pension release to take money early from the State Pension or unfunded public sector schemes which cover organisations and professions including the NHS, teachers, armed forces, civil servants, firefighters and the police.

Ok, but you haven’t mentioned the tax…

As you know, you can take the first 25% of your pension tax free; anything you take above this amount counts towards your annual income. This is why you need to take extra care if you are thinking about taking more than 25% of your pension, as this could push you into a higher income tax bracket.

What happens to the money left in my pension?

You have a number of options: from leaving your pension invested to grow for the time being, to starting to take an income from it.

Is pension release legal?

Absolutely. According to UK law, people aged 55 or over have been able to take up to 25% of their pension savings tax free since 2006. The pension freedoms introduced in April 2015 mean that you can now take as much money as you like from your pension.

Why are people doing this?

People are taking money early from their pension for all sorts of reasons. Some of the most common include:

  • Tackling a debt, such as a credit card, loan or paying off the mortgage.
  • Helping a family member with a big life event, such as a wedding or deposit.
  • Replacing the car and making renovations around the house.

Of course, you might have a completely different reason for wanting to take money early from your pension.

Is it something I should do?

This is the big question and there are lots of things to consider before deciding if pension release is right for you. While taking money early from your pension could make a telling difference to your life right now, it could affect the amount of money you have further down the line. Is this something you can live with? The best way to answer this question is to talk with a regulated pension advice specialist.

Request your information packRequest your free information guide

Get a deeper understanding of the current pension freedoms with our FREE information guide. Complete the quick and easy enquiry form on the right and we will send you all you need to know about taking tax-free cash from your pension and what it could mean for you. We will also let you know how our no obligation pension review works; why it won’t cost you a penny to receive our full, independent advice; and how to take advantage of it.

What to look out for

We are making an educated guess that you are already interested in pension release and it might be that you are looking at a number of different companies. With this in mind we have listed below some absolute musts to bear in mind on your internet travels. Of course, you can pick up the phone to us at any point and we will help you.

Is the company regulated by the Financial Conduct Authority (FCA)?

Your pension is too big a deal to take lightly, so the bare minimum you should be looking for is a company regulated by the official government body. It’s easy to check – simply use this register: our FCA company number is 754580. If the company is not registered then it could be a scam.

How to spot a scamSpotting a scam

Unfortunately there are different types of pension scams and they can all result in you losing a lot of money. Find out more about what to look for when researching financial advisers and don’t forget that using an FCA-registered company is the best way to stay safe.

How much will it cost you to review your pension?

If you want to take money early from your pension then the best thing – and in some cases the only thing to do is seek regulated financial advice first. Generally the adviser will review your pension before giving their recommendation and the cost for this can vary wildly. Our view is that people shouldn’t have to pay to get expert advice on what to do with their pension. That is why we only charge clients a fee if they agree with our recommendation and instruct us to act upon it.

What are the options for your remaining pension?

If you ask an adviser to review your pension, with the aim of taking money from it early, then they should advise you on what to do with any remaining pension fund based on your needs and circumstances. You should steer clear of any company that is not willing or able to do this for you.

How can we help?

  • If you ask us to have a look at your pension then:
  • We will show you how much of your savings you could release tax free.
  • We will not charge you a penny to review your pension and make a recommendation for it.
  • If we believe that pension release is the wrong option for you, then that is exactly what we will say.
  • There is no obligation: you can stop the review at any point, with no fee charged, and take as long as you need to make any decisions.
  • We will only charge a fee if you instruct us to act on our recommendation, and you would not need to find this fee as we would deduct it from your pension.
  • We will deal direct with your existing pension providers, making any necessary arrangements and transfers.
  • We can continue to manage your remaining pension, reviewing it annually to make sure it is on track to delivering what you need it to.

Find out more about how we make life easier for our clients. 

What could the impact on your life be?

Pension release impacting lifeIt feels great to finally put an issue to bed. The outcome is usually less worry and distractions, and ultimately that means more time to focus on the things that are really important to you. This is the impact pension release could have on your life.

The important thing to remember is that pension release is not right for everyone, as it could reduce the amount of income you have in the future. That’s why asking for regulated, independent advice from a pensions expert should always be your first step.

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

Can I leave my pension to loved ones?

Yes, it’s usually possible to leave money in your pension to one or more people when you die. Many schemes will let you pass on your savings, and if you receive a guaranteed income your provider may pay a lump sum or an income to your partner. If you’re thinking of buying an annuity then you need to be careful you choose the right one because not all of them will pay an income to someone else when you die.

Find out more

What is a no obligation pension review?

With this type of review a regulated pension expert will examine in detail your circumstances before clearly and simply advising what they think you should do with your pension. You will not have to pay for this review and you are not committed to follow the advice in any way.

Find out more

What are the new pension rules?

The new pension rules (also called pension freedoms) removed many of the restrictions around how you can take money from your fund; if you are at least 55 years old there is a good chance that you can take as much money as you want. Whether it’s the right thing for you to do or not depends on your circumstances and the type of pension you have.

Find out more

How do I take money from my pension?

This really depends on the type of pension you have. Sometimes you can take money direct from your current scheme. In other cases you need to transfer your pension to a new scheme before you can release any money. Your best bet is to talk with a financial adviser first.

Find out more

Do I have to be retired to access my pension?

You can generally access your pension savings from the age of 55, whether you are working full time, part time or have already retired. There are some restrictions for certain types of workplace pensions, though, and in rare circumstances money can be withdrawn at a younger age.

Find out more

Can I take money from my private pension to buy a property?

Yes, money taken from your private pension can be spent however you like. You can also use it to tackle your existing mortgage, as a deposit to help your children buy a house, or to invest elsewhere. If you are looking to invest in property then you need to know the costs and risks, especially if you already own a house.

Find out more

Can I take all of my pension in one go?

If you are aged 55 or over and have the right type of pension then you can take as much money as you like from it. It’s not a decision to take lightly because you could end up paying a lot of money to the taxman. And if you do take all of your pension savings now, how much money will you have to live on in the future?

Find out more

Can I take money from my pension at 55?

If you have the right kind of pension and are aged 55 or over then you can take as much money as you like from your pot, with 25% of it being tax free. The big thing to consider is the impact this could have on your life further down the line, particularly your future income.

Find out more

How much of my pension can I take?

You can generally take as much money as you like from your pot, as long as you are aged 55 or over and have the right type of pension. There are lots of things to think about as taking money from your pension could leave you with a sizeable tax bill and have a big impact on how much money you have to live on in the future.

Find out more

Is pension release legal?

Yes, it is. Pension release is just a fancy term for taking money out of your pension and in most circumstances this is entirely legal from the age of 55. Unfortunately there are lots of pension scams that encourage people to withdraw money at an earlier age, which could result in you losing your savings and facing a huge tax bill.

Find out more

Am I eligible for pension release?

If you are at least 55 years old and have the right type of pension then you can take as much money from it as you like. If you don’t have the right type of pension then you may be able to transfer into one, although this could mean giving up some very generous benefits.

Find out more

Important information

Releasing your pension benefits early could reduce your income at retirement and therefore is only suitable for a limited number of people and circumstances.

On this page we talk about your pension and tax implications. Tax treatment depends on your individual circumstances and may be subject to change in the future.

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