Pension Withdrawals Making Sense
Research* has revealed that one in five over 55’s with a private pension withdrew a lump-sum during 2019, although the study does suggest that, for many, this was not a financially sensible course of action.
Stash The Cash
The most popular reason for accessing pension wealth was to put money into a savings account, with one in four respondents doing so. Around one in five people who withdrew money from their pension, spent the proceeds on home improvements.
At first glance, the research appears to imply a sensible approach to pension withdrawals. However, in reality, shifiting a taxed lump sum from a tax-efficient pension simply to place the proceeds on deposit makes little financial sense. This is partly due to the potential tax bills, but also relates to inheritance rules which means most people would be better off leaving money in a pension until they need the cash for income or specific spending requirements.
It’s clearly always always essential to take professional advice before making any pension related decisions, particularly in the current economic climate. So, if you are considering accessing your pension soon, GET IN TOUCH – we will help you make the best decision for you.
*Canada LifeWe provide you with impartial advice and services, delivered in plain English and tailored to your individual needs. Above all, we will treat every client with respect and provide personal attention from your first enquiry.
We arrange bespoke solutions for our clients, providing a tailored one-to-one advisory service, delivered face-to-face or remotely, depending on what suits you.
Please click on ‘Become a Client, Enquire Now’ at the bottom of the page and complete the enquiry form and we will normally contact you within the same working day during business hours or if you would prefer us to contact you outside normal business hours then please advise and we will quite happily do so. Alternatively you can email us with details about your requirements to firstname.lastname@example.org or call us on 0151 372 0388
The above article is purely for information purposes and does not constitute advice.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.