Cashing in your pension, or unlocking your pension as it is also known, are misleading phrases, since in most instances all it means is taking your pension lump sum, and/or taking an income.

For most people it is not possible to cash in or unlock all of your pension. However regardless of the type of scheme you currently have, provided you're 50 or over you can unlock/take your pension benefits in one way or another. How you take these benefits will depend on the type of scheme you have.

Many people cash in (unlock) their pensions to:

• Pay off debts

• Pay for home improvements

• Use as a deposit for a property

• Buy another property

• Support their business

• Provide short term cash

For many people all they want is their tax-free lump sum, and no income, and in many circumstances this is possible, although much depends on what type of pension you have.

There are a number of downsides to taking the cash from your pension, especially if you are doing it earlier than expected. 

Unlock your pension - the dangers

• There may be penalties for unlocking your pension early

• There may be a reduction in benefits if you cash in your pension early

• Cashing in your pension early is likely that the fund would be smaller rather than waiting

• If you take an income after unlocking your pension it is possible that it would be taxed

• Unlocking your pension early will reduce the benefits you could take in the future

There are three basic methods of actually cashing in your pension. You may be able to take your benefits through your existing arrangement, or you could take you tax-free cash and buy an annuity or invest in an income drawdown contract, contact us online, or call 0800 011 2713 to find out more about cashing in your pension, or click on the links below to find out more about cashing in a:

Final Salary Scheme

Occupational Scheme Money Purchase

Personal Pension, Retirement Annuity Contract, Free Standing AVC, and Section 32

  Warning: Taking your pension benefits early is unlikely to be in your long term financial interests as it will probably reduce your retirement income. Always seek independent financial advice. Contact us now

Don't take any chances with your pension, your retirement will depend upon it, talk to an independent pension specialist now