Pension schemes are the key to financial future upon your retirement age. You rely on your pension schemes to meet your living expenses and lifestyles after you stop working. But, there may be circumstances when you would require emergency cash to meet the unforeseen expenses. So, in such situation Pension Release becomes handy and viable option for you. It allows you to take out 25% of tax free, lump sum money from your pension scheme which you can use for meeting your emergency expenses or invest in other financial instruments for better returns.
Reasons for Availing Cashing In Pension
In many cases, people don’t prefer touching their pension pot until they retire. But, there are many circumstances when one Cash in Pension and some of the reasons include:
- Investing the money in other financial instruments for higher returns
- Entering the retirement early
- Taking expensive holiday
- Paying off high-interest debts
You might be wondering when it is a best option to consider cashing in Pension and when it is not. Well, there is no direct answer to this question as it all depends on the circumstances whether you should Cash in Pension or not. So, always seek advice from reputed and certified financial advisor prior to cashing in pension.
Ensure You Are Aware of Pros and Cons of Cash in Pension
It is always recommended to speak with an impartial expert prior to cashing in pension. They can advice you whether it is a good idea or not to Cash in Pension. Before cashing in a pension it is necessary for you to know the consequences of this option and think about it twice. Consider the below points:
- Whether you can manage with the reduced funds at retirement
- Check if alternative is available to access to instant funds
- Know the possible penalties of early Cash in Pension
- Cashing can affect your pension benefits