Tax Free Cash

The more cash you take the lower the level your pension will commence.

Personal Pension Plans allow you to take a maximum of 25% of the value of the fund as a Tax Free Lump Sum.

For older pensions written under the '226' rules (see your policy) the tax free cash is a little more awkward to calculate.  You are entitled to three times the remaining pension!  Yes it takes an actuarial calculation to get this right!  If you have one of these pensions, and want a lump sum, it is best to ask for a report with the maximum tax free cash.   You can then make an informed decision of how much to take, leaving the balance to increase your pension income.

If you are a member of a company pension scheme (not a group personal pension) or you have an old company pension invested in a Pension Transfer Bond you will need to ask the current insurance company or trustee to tell you how much tax free cash  you are entitled to.  You can then make an informed decision of how much to take and then transfer the balance to your chosen annuity company.

IF YOU ARE UNSURE ABOUT ANYTHING YOU SHOULD SEEK INDEPENDENT FINANCIAL ADVICE.