News Archive - July 2012
Pension unlocking?
03/07/2012
For a few years now there have been advertisements from companies offering to 'unlock' your pension. This used to mean that they would help you to access your pension early, as long as you were over 55 which is the current minimum pension age for the majority of people.
This is not always the best advice, but it offers a solution for people who were in dire straits with debts or other reasons to access their pension or tax-free lump sum immediately.
However, there are a new breed of 'pension unlockers' who offer to get you access to your entire pension fund as a lump sum, less their charges. They do this by using offshore pension vehicles, or other complicated schemes to try to get around the rules. These schemes can appeal to people who are disillusioned with falling annuity rates.
You need to be aware that 'unauthorised payments' from pension schemes can be subject to large tax penalties by HMRC. An unauthorised payment could be a payment out of a pension before age 55, or a lump sum of greater than 25% of the fuind value.
If you get caught by a tax penalty then you would have no recourse to the adviser who set up the scheme for you.
In short - these schemes are dodgy, and however disappointed you are with your pension or desperate yo uare for the cash - it just isn't worth the risk.
Call Mulberry Financial if you want honest, legitimate financial advice.
The material here is for general information only and is not intended to be relied upon for individual investment decisions. Appropriate independent advice should be obtained before making any such decisions. Mulberry Financial Ltd does not accept any liability for any loss suffered by any user as a result of any such decision.
The information is based on our understanding of current HMRC rules and practices (as at the news article date) which are always subject to change. Taxation and trust advice and Cash ISAs are not regulated by the Financial Conduct Authority. This site is aimed at UK residents only.
Please remember that the prices of shares and other investments can fall sharply. You may not get back the money you originally invested. Past performance is not necessarily a guide to the future.
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