What can you do with a With Profits fund at the end?
Discussion
I've done a forum search and Googled it but no answer to the simple question - Can I take out the whole pension fund at the end of term on a With Profits Fund?
I've got one pension which is just about OK but two other small ones which will pay bugger all per year and would like to just cash in?
I've got one pension which is just about OK but two other small ones which will pay bugger all per year and would like to just cash in?
Is it in a pension wrapper - IE did you receive tax relief on the contributions? If so, you cannot generally access the funds until you are 55. If not, you should be able to access the funds.
I tend to think of 'With Profits' products as the life insurance/savings 'Endowment' plans often sold as a means of paying an interest only mortgage? If it's one of those, the mortgage company may have a registered interest in it unless the mortgage has been redeemed. Also, these products tend to have annual and final bonuses applied, so cashing-in early can be poor value.
I tend to think of 'With Profits' products as the life insurance/savings 'Endowment' plans often sold as a means of paying an interest only mortgage? If it's one of those, the mortgage company may have a registered interest in it unless the mortgage has been redeemed. Also, these products tend to have annual and final bonuses applied, so cashing-in early can be poor value.
If you’re of an age there’s nothing to stop you taking the whole fund out of the pension in one lump.
Typically 25% will be tax free and the balance will be taxed at your highest nominal income tax rate. So depends on the amount, your other income etc as to if it makes sense or not. Also, if you’re not going to actually spend the money it may make more sense to leave it in the tax free pension, in another fund, or funds, until such time as you do need it.
As ever take advice on your own circumstances.
Typically 25% will be tax free and the balance will be taxed at your highest nominal income tax rate. So depends on the amount, your other income etc as to if it makes sense or not. Also, if you’re not going to actually spend the money it may make more sense to leave it in the tax free pension, in another fund, or funds, until such time as you do need it.
As ever take advice on your own circumstances.
That would be due to the type of pension, typically a Retirement Annuity Contract (RAC) or old style personal pension, and is not to do with the fund itself. Frequently the annuity is stipulated as to what you get, single life, no escalation, no guarantee period, for example, and thus is not particularly flexible and may not meet your current requirements at retirement.
As ever take advice as if it does not meet your needs you do not have to take the terms offered as you can always move it elsewhere.
As ever take advice as if it does not meet your needs you do not have to take the terms offered as you can always move it elsewhere.
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