Withdrawing 25% from a private pension - Advice needed please

[Chloe Brown Summers]

Hi all, I am 55 years old and wanted to withdraw 25% of my pension pot to pay towards my mortgages.
My provider has just stated: "under government legislation, if the transfer is. over £30k, we are required to obtain a letter from your IFA confirming they have provided advice to you"
Is this mandatory for a withdrawal as well?
A friend suggested I tell them that this is my decision and I do not wish to take advice and ask them for a declaration to sign.
Otherwise, I will have to spend a considerable amount of money just to access it.
Any suggestion would be appreciated.
Thank you!

 

[DontAsk]

You can often get free advice.

Are you sure you are making the right decision?

Look up James Shack on YouTube and search for his visits about the mistakes people make when doing into their pension.

I would say it's almost certainly not the right thing to do unless you are really struggling to meat the mortgage patients, but I'm not allowed to give advise so that's just personal opinion.

Even if you have to pay for advise, it will be worth it.

 

[UK Contractor Accountant]

My provider has just stated

which provider is that?

Suggest you ring them and ask for the specific legislation that requires IFA confirming advice.

 

[Fagin2021]

You can often get free advice.

Are you sure you are making the right decision?

Look up James Shack on YouTube and search for his visits about the mistakes people make when doing into their pension.

I would say it's almost certainly not the right thing to do unless you are really struggling to meat the mortgage patients, but I'm not allowed to give advise so that's just personal opinion.

Even if you have to pay for advise, it will be worth it.

Agree. The way the OP has phrased the query indicates she doesn't understand the implications of drawing down a pension pot. Do it wrong and you can lose lose thousands unnecessarily.

If you don't understand how it works, it's worth spending a few hundred on financial advise.

 

[Chloe Brown Summers]

Okay, understood, thank you all

 

[UK Contractor Accountant]

its the 25% tax free lump sum - the rumor mill was in full flow that Labour were going to tinker with this to bridge the tax gap!

 

[Lisa Thomas]

Hi all, I am 55 years old and wanted to withdraw 25% of my pension pot to pay towards my mortgages.
My provider has just stated: "under government legislation, if the transfer is. over £30k, we are required to obtain a letter from your IFA confirming they have provided advice to you"
Is this mandatory for a withdrawal as well?
A friend suggested I tell them that this is my decision and I do not wish to take advice and ask them for a declaration to sign.
Otherwise, I will have to spend a considerable amount of money just to access it.
Any suggestion would be appreciated.
Thank you!

I know it's true you need the IFA confirmation if you are transferring your pension to another provider, but not sure if this is true when drawing down the 25%.

Hopefully a pensions expert can come along and confirm.

 

[GraemeL]

Whatever, do it quickly to avoid likely tax imposed in October budget

 

[Fagin2021]

Whatever, do it quickly to avoid likely tax imposed in October budget

That's not good advice. If someone is panicked into taking all their pension pot in order to get the 25% tax free element, they could end up with a huge tax bill on the remainder.

Any changes to the tax-free rules in October (which are only rumoured at present) are likely to limit the tax-free element only for people with very large pension pots.

 

[Frank the Insurance guy]

Hi @Chloe Brown Summers - What type of pension is it from? If it is a from a Defined benefit pension, or a Defined Contribution Benefit pension which has guaranteed annuities, you are legally required to seek financial advice before making a withdrawal, where the pension value is over £30K.

I understand that if yours is not a Defined Benefit pension, or does not include a guaranteed annuity - you should not require the financial advice.

I suggest you engage with another financial advisor for a 2nd opinion.

 

[JEREMY HAWKE]

The socialist regime hate pensions and pensioners
It would be safer buried in the woods

 

[UK Contractor Accountant]

would be safer buried in the woods

is that the pensioners or their pensions

 

[JEREMY HAWKE]

is that the pensioners or their pensions

Both for various reasons

 

[Gyumri]

I am 55 years old and wanted to withdraw 25% of my pension pot to pay towards my mortgages.

@Frank the Insurance guy and others are right to say you need to take some independent pension advice depending on what type of pension pot you are referring to.

They are purposely complicated and designed by number crunchers to prevent poor pensioners knowing which way to turn.

The pros and cons of defined benefit pensions | PensionBee

Find out how defined benefit pensions differ from defined contribution pensions, for better and worse.

www.pensionbee.com

 

[WaveJumper]

On going from @Frank the Insurance guy advice, my advice is speak to these in the first instance

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

Don't rush into this, it might well pay to keep you mortgage running, also if you have several pension pots if could scupper any future plans on withdrawing cash ........ speak to pension-wise

 

[Newchodge]

is that the pensioners or their pensions

I think it is probably the alleged socialist regime. Although how anyone can see the current Tories Mark II government as socialist is beyond me.

 

[Lisa Thomas]

OP- assuming you are required to get the advice, I can recommend an IFA that specialises in this - feel free to dm me.

 

[xjr13m]

Hi all, I am 55 years old and wanted to withdraw 25% of my pension pot to pay towards my mortgages.
My provider has just stated: "under government legislation, if the transfer is. over £30k, we are required to obtain a letter from your IFA confirming they have provided advice to you"
Is this mandatory for a withdrawal as well?
A friend suggested I tell them that this is my decision and I do not wish to take advice and ask them for a declaration to sign.
Otherwise, I will have to spend a considerable amount of money just to access it.
Any suggestion would be appreciated.
Thank you!

As I understand it you are obliged to take financial advice before transferring more than £30K out of a defined benefit pension, for example into a SIPP. But I don't believe this is necessary for a tax free withdrawal. However, as others have said, think hard about whether this is the best course of action for your situation and the impact it will have on your future pension provision.