Pensions often form an important part of a person’s retirement plan. However, this can be impacted when the timeline is shortened and we stop working early. Read on to learn more.
Taking funds from your pension pot
When you can withdraw money from a pension depends on the rules of the pension scheme, but it’s typically allowed at age 55. However, it may be possible to access funds earlier if you are retiring early due to ill health or if you hold the right under a scheme you signed up for before April 6, 2006, to draw your pension before age 55.
Some firms offer to help saver get money from their pension before age 55. However, if this is an unauthorised payment, you will pay up to 55% tax on it. As a rule, those who retire early have smaller pension pots as they have had less time to rise in value.
Accessing your pension early for health reasons
It is sometimes possible to get higher payments when you must take your pension earlier due to a health condition. Those whose life expectancy is less than one year can also sometimes access their entire pension as lump sum tax free when certain circumstances apply.
As experts on retirement planning in Shropshire and Chester, we help those seeking to retire early with expert advice and sound financial strategies. Whether you have questions about your pension regarding investments or concerns regarding your retirement income, contact us today at Hartey Wealth Management.
