It has long been the case that pensions are a great way of saving money; one of the best, but this doesn’t necessarily mean that they are ideal for most people.
In fact, the idea that you have to follow a stringent payment plan, with no option to withdraw money when and if needed, has put off many people who could have benefited from such a great source of high interest savings.
However, thanks to the Chancellor’s 2014 budget, this is no longer the case. If you’re prepared to lose some of the benefits of your pension in return for a quick payout, then it is possible to unlock a portion of your pension savings after you’ve reached the age of 55 (up to 25% of total savings), all as a tax free lump sum.
The system as a whole does get more complicated, but if you’ve a pension pot of over £30,000, then this is the only way in which you can receive a big lump sum from your pension. However, if your pension has between £10,000-30,000 in cash, then after you’ve reached 60 years old you can choose to have it all released (although only the first 25% will be tax free).
There are a lot of other things to consider when unlocking your pension, so it is definitely worth looking into greater detail by visiting government websites which will include all of the relevant information.