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Pension release explainedWe asked a leading pension release provider* to explain pension release in their own words so you can understand it better. Pension Release allows you to access money you have saved for your pension before you retire, or before the full term of the pension is up. You could release tax free cash from a private or company pension but this service does not apply to state pensions. You will need to be 55 or over, have a UK pension that you are not receiving benefits from and have a need for cash. The amount of accessible cash in pension funds depends on the total value of your individual scheme. You are allowed to release up to 25% as a tax-free sum, the rest must then be re-invested to provide an income for you during your retirement. You can choose to receive this money yearly, half yearly, or monthly, whatever suits your needs best. You don't have to release the maximum amount of cash from your pension and you should only release what you need. It is worth pointing out that the whole purpose of making contributions to a pension scheme is to provide an income during retirement. It is therefore important to be aware that releasing your pension benefits early could reduce your income and your standard of living in retirement. This is why Pension release is only suitable for a limited number of people and circumstances and shouldn’t be seen as an easy option to raise cash. *Courtesy of Portal Financial LLP |