Taking a Personal Pension Early

I have one small personal pension that was frozen when I was made redundant 6 years ago.  I am almost 51 and could take this early from age 50 if I wanted, but I believe there would be “financial consequences” involved in taking it so early.  I was diagnosed with BC 4 1/2 years ago and try to make the most of life.  I work full time but feel that a boost to my monthly wage, along with a lump sum would help me with my goal of living for today.  I worry that I may not be around to claim my pension if I leave it until later on and feel that it would be a good idea to take the money when I can.  If anybody else feels this way and has done this, or if anyone has any advice or knowledge on doing this I would love to hear about it, as this may help me make my decision. Thanks in advance for any advice anyone can give.  Sunny Day x     

Hi Sunnyday,
I’m younger so such decisions aren’t my world yet, though have to confess can see what you mean re all this making you rethink what, when living life…
You mention financial implications if you were to take the pension early…if you haven’t already checked how much you would get if you took the pension out at various different ages, then I suggest you do so since this may help inform your decision…ie if you were to take the pension out in 5, 10 or 14 years time it would be worth increasingly more each year. If its a private pension to get an idea of these figures you would probably need to consider how much you would get per year at various ages, if you were to purchase an annuity.
It may be worth asking an annuity provider if they would give a higher amount given your precise previos diagnosis and treatment …(eg, some annuity providers give a higher amount each year for say £100k invested into an annuity if a person has a particular medical condition which the annuity provider may consider means they are less likely to have to pay a sum each year until eg 90 years old - I think they may view things like eg lung cancer or previous heart attacks in this way hence paying a higher amount each year since they statistically don’t think they’ll have to pay it as long…don’t quote me on that but trying to convey the gist!
I hope that helps
seabreeze

Hi

 

It might also be worth looking into income drawdown as an alternative to buying an annuity. There is some info here

 

drawdownexplained.co.uk/drawdown-guide/

 

Have you also checked what your state pension will be. You can get that info quite easily and often you have the option of paying up to bridge any shortfall.

 

Mary

Jenny i am in a similar dilemma. I have just returned to work…diagnosed with sbc in may…and was told that we fall under the disabilty discrimination act and therefore can claim our pensions on ill health retirement. I agree we may not bw here to get our pensions but at the moment i am trying to work. Its gd to know though that this is an option. Its v confusing!

Thanka jenny. I am only doing short hours at the moment but so far so gd xxx

I’ve had thee most gruelling day talking finance with a Macmillan CAB benefits advisor. I was planning to do what you are thinking of. He suggested I speak to Macmillan advisor for pension and mortgage issues
Haven’t yet as exhausted from the 3 hr session today. I’ll put the tel no up tomorrow. I got very distressed as I have mets and want a lump sum to do stuff before I’m proper I’ll. I’m being paid till September then on benefits, and so can’t have too much cash in bank. It’s a disgrace. I’ve paid into my pension, it’s mine. It’s not a huge sum. Well fed up.

Hi Sunnyday. That’s helpful. I’m struggling with this one, as when my pay runs out in Sept I’ll need to claim benefits, but at this point I don’t know if I am entitled to ESA or means tested. If former I can have 16k in bank, but due to bc I returned to work part time, so worried my contributions won’t be enough. This means I can only have 6k in bank, which is less than my pension, and would not be able to claim benefits. It’s a minefield, I need help.

Hi imac,
I have just returned from.attending a Living Well course at the Penny Brohn centre in Bristol. Whilst on that course several ladies stated how they had used the Macmillan finance guidance arm and another had attended a Maggies Centre that also assisted her with the completion of the dreaded forms. There is another site that escapes my memory atm, will try to post that later. Good luck through tjis quagmire x x