Early Tax Free Cash

You can take tax free cash early from your pension fund, taking advantage of changes brought in from April, 2006 (A-Day).

These changes allow you access to your tax-free cash, but without the need to buy an annuity and start drawing your income.

How it works; transferring your current plan

To achieve this you would need to transfer your current pension plan or plans into a suitable income drawdown plan and then select a zero income option.

Some important considerations

Whilst taking tax free cash early is becoming a very popular idea, for example, to clear debts, care does need to be taken when assessing the suitability of this route. As pensions offer tax efficient savings, it may be more appropriate to find alternative sources for capital, but we can help you with that assessment.

Building the value of your remaining fund

The balance of the fund, i.e. after the tax-free cash has been taken, is invested in a mix of funds ready for the income to be accessed as required. In addition, you can also still make contributions to the plan, building further funds and tax-free cash.

Important footnote

A word of caution. Taking the tax-free cash early will mean there is less of a pension fund for your eventual annuity purchase. Therefore, you should always seek advice before setting up a drawdown arrangement.

To obtain your free, no obligation annuity quotes you can enquire online, or call us free on 0800 0124 374. One quick free phone call from you can make all the difference. We’re here Monday to Friday, 9 am to 6 pm.