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How Could Divorce Affect Your Pension?

How Could Divorce Affect Your Pension and Retirement Income?

By | Independent Pension Advice | No Comments

If you have divorced or dissolved your civil partnership or are in the process of doing so, you may not realise this could affect how much you will have for your retirement income. If you divorce or dissolve your civil partnership before you retire, pensions you and your partner have will be taken into account when dividing assets, meaning you could retire with less money than expected.

The types of pension that can be shared as part of a divorce or dissolution settlement include:

  • Personal pension schemes
  • Workplace pension schemes
  • Additional State Pension (but not the basic State Pension)

The total value of the pensions you and your ex-partner have each built up will be taken into account, this will include pension savings that were built before you were married or in a civil partnership, but will not affect your basic State Pension.

Going through a divorce or dissolution is already a difficult time, to help relieve some of the stress and uncertainty of how your retirement could be affected it is imperative to seek independent pension advice as soon as possible to be clear on your position and your options before any action is taken or court proceedings to divide assets begin.

If you have divorced or dissolved your civil partnership or are in process of doing so, it is advisable to seek independent pension advice to determine whether your workplace or personal pensions could be affected. If you are looking for independent pension advice, we can help you find a pension adviser in your local area to help you identify how your pension savings could be affected.

Our recommended financial advisers provide independent pension advice across the UK to work with you to review your current pension plan and determine whether a change in your personal circumstances, such as divorce could affect your retirement income. All of the financial advisers we recommend provide advice that is tailored to your unique circumstances.

Divorce or dissolution after you retire

If you get divorced or dissolve your civil partnership after you retire, your pensions may be treated slightly different than if you separate before you retire. To get a better understanding of how your pension could be affected by divorce or dissolution after retirement it is advisable to seek independent financial advice that is tailored to your unique personal circumstances.

How your State Pension is affected by divorce or dissolution

The new State Pension cannot be shared if your marriage or civil partnership ends, however if you are entitled to the Additional State Pension a court could order that this payment is eligible for sharing as part of your divorce or dissolution. Seeking financial advice will help you determine whether this is applicable to your circumstances and can advise on how your retirement income may be affected.

If you are looking for independent pension advice in your area we can help you find a specialist pension adviser that can provide advice on all aspects of pension planning, including pension planning advice when you divorce or dissolve your civil partnership.

Seeking independent pension advice will help you to gain a clearer understanding of the different options available to you and ensure that you have the most effective retirement planning strategies in place following a change in your personal circumstances.

At PensionAdvice.org we can help you find a FCA registered financial adviser for independent pension advice. The financial advisers we recommend offer bespoke independent pension advice across the UK on all aspects of pension and retirement planning.

Pension Pot

What Can You Do With Your Defined Contribution Pension Pot?

By | Chelmsford | No Comments

If you are nearing retirement age you may be starting to consider what to do with your pension pot and be thinking about the opportunities available to you. With a defined contribution pension when you reach your selected retirement age you can usually take 25% of your pension pot as a tax-free lump sum.

There are several ways you can use the remaining funds such as using your pot as an adjustable income or taking smaller cash chunks. The option that is best suited to you will depend on your personal circumstances and will require careful consideration. Before making any changes to your pension pot it is advisable to seek independent financial advice to ensure you are taking the optimal course of action.

If you are nearing retirement age or are planning ahead for the future and would like advice on how you can use your pension pot, we can help you find a local financial adviser in Chelmsford that specialises in pension advice.

Our recommended financial advisers provide pension advice in Chelmsford and across Essex to work with you to identify opportunities available to you and determine the best solutions for your pension pot. All of the financial advisers we recommend provide advice that is tailored to your unique circumstances.

How you can use your pension pot

There several options when it comes to your pension pot and what you can do with it once you reach retirement age, including:

Leave your whole pot untouched

Just because you can have access to your pension pot, it doesn’t mean you actually have to do anything with it. If you are still working when you reach your selected retirement age, you may decide to leave your pension fund invested in your pot until you need it.

Leaving your whole pot untouched could result in your pension pot growing as it will have longer to benefit from investments. Even if it does not grow, leaving your pot untouched could mean a higher retirement income as the same amount of money would not have to last as long.

Leaving your pot untouched would also mean that you wouldn’t be liable for tax on your pension fund and should you die before 75 your pot can be passed on tax free.

Take cash in chunks

Should you wish to and depending on the rules of your scheme, you may be able to opt to take your pot in smaller cash sums until your pot runs out. You would have control on how much you take and when you take it. Taking your pension pot in smaller cash chunks would mean that your 25% tax-free cash lump sum is not paid out in one go but over all the smaller cash chunks. For example, each time you take a chunk of money 25% would be tax-free.

Adjustable income


Your pension pot would be invested to provide you with a regular income in retirement. You have control of how much you take, when you take it and how long you want your pot to last. You will still receive your 25% tax-free lump sum and the other 75% is invested to give you a regular taxable income.

Also known as flexi-access drawdown, this option may not be offered by all pension providers and as your pension pot is invested the growth of your pot would depend on investment performance and could result in a loss.

If you are looking for pension advice in Chelmsford we can help you find a specialist pension adviser that can provide advice on all aspects of pension planning, including advice on the best ways to use your pension pot when you reach retirement age.

Seeking pension advice will help you to gain a clearer understanding of the different options available to you and ensure that you have the most effective retirement planning strategies in place for your personal circumstances.

At PensionAdvice.org we can help you find a FCA registered financial adviser for independent pension advice in Chelmsford. The financial advisers we recommend offer bespoke pension advice in Chelmsford on all aspects of pension and retirement planning.

Can You Take Your Pension Before 55?

Can You Take Your Pension Before 55?

By | Lincolnshire | No Comments

You cannot usually take money from your pension pot until reach the age of 55, however there are some cases where it may be possible. If you are seriously ill you may be able to take your pot early, regardless of your selected retirement age. The rules on taking your pension before the age of 55 depend on your pension provider.

If you think you may be eligible to take your pension early due to ill health, it is advisable to seek independent pension advice. A financial adviser that specialises in pension advice will be able to advise you on your best course of action and will help you determine whether you can access your pension pot early.

If you are looking for pension advice in Lincolnshire, we can help you find a pension adviser to help you with all aspects of pension planning, including taking your pension pot early due to ill health. Our recommended financial advisers provide pension advice in Lincolnshire to work with you to ensure you have the most effective pension planning strategies in place. All of the financial advisers we recommend provide advice that is tailored to your unique circumstances.

Taking your pension early due to ill health

If you are unable to work due to illness, you could be eligible to take your pension before the age of 55 or your selected retirement age. Your eligibility will depend on the rules set out by your pension adviser and their definition of ill health. A financial adviser will be able to help you determine the rules of your pension scheme and whether you are eligible.

Taking your pension early if you are seriously ill

If you have been diagnosed with a terminal illness, you may be able to take your whole pension pot tax-free. This could apply to you if:

  • You are expected to live for less than one year
  • And your pension pots are worth less than the lifetime allowance of £1 million.
  • Can you take the State Pension early?
  • There are not currently any provisions in place for taking your State Pension early. The earliest you can begin to claim your State Pension is when you reach your State Pension age, which will depend on your gender and the year you were born.

If you are looking for pension advice in Lincolnshire we can help you find a specialist pension adviser that can provide advice on all aspects of pension planning, including whether you are eligible to take your pension before your selected retirement age.

Seeking pension advice will help you to gain a clearer understanding of the different options available to you and ensure that you have the most effective strategies in place for your personal circumstances.

At PensionAdvice.org we can help you find a FCA registered financial adviser for independent pension advice in Lincolnshire. The financial advisers we recommend offer bespoke pension advice in Lincolnshire on all aspects of pension and retirement planning.

Overcoming a Shortfall in your Pension Savings

Overcoming a Shortfall in your Pension Savings

By | Essex | No Comments

When planning for your retirement it is imperative you set clear retirement income goals, without goals you cannot effectively check if your pension savings are on track. When setting your retirement income goals, you will need to consider how much income you will need to have the retirement you want. There are many factors to consider when planning your retirement income, such as:

  • Living expenses in retirement – this could include cost of living and household bills.
  • Hobbies – do you plan to take up new hobbies when you retire?
  • Travel expenses – if you plan to travel more in retirement you will need to factor this into your retirement income planning to ensure it is achievable.

Once you have clear retirement income goals outlined in your pension and retirement plan, you can use these to determine whether your pension savings are on track and identify any shortfalls in your pension savings.

Shortfalls in your pension savings can occur if you have had periods of reduced income, such as maternity leave or have had to take time off work through accident or illness or when your pension investments have not performed as well as anticipated.

The earlier you identify these shortfalls the more time you will have to react to them and adapt your pension savings plan to overcome them. This is one of the most important reasons for regularly reviewing your pension plan and without regular reviews a shortfall could go unnoticed until it is too late to overcome.

If you think you may have a shortfall in your pension savings or are unsure if you are on track with your retirement income goals, it is advisable to seek independent pension advice. If you are looking for pension advice in Essex, we can help you find a pension adviser to help you identify how your pension savings are performing and help you react to any shortfalls.

Our recommended financial advisers provide pension advice in Essex to work with you to review your current pension plan and determine whether you are on track with your retirement income goals. All of the financial advisers we recommend provide advice that is tailored to your unique circumstances.

Actions to consider if you have a shortfall in your pension savings

If you have identified a shortfall in your pension savings there are a number of actions you can consider to help overcome the shortfall. It is imperative you seek independent pension advice before making any changes to your pension plan to ensure you are taking the best course of action to overcome shortfalls in your pension savings.

Factors you may want to consider include:

  • Are you making the most of available pension schemes?
  • Have you joined your workplace pension scheme?
  • Could you boost your contributions to your workplace pension scheme?
  • Are there other personal pension schemes you could benefit from joining?

The cost of overcoming a shortfall in your projected pension income will vary depending on your age, the further away you are from retirement the longer you will have to overcome the shortfall and therefore will have more time to boost your pension savings and allow them to grow.

If you are looking for pension advice in Essex we can help you find a specialist pension adviser that can provide advice on all aspects of pension planning, from pension planning strategies to reviewing and updating pension plans to ensure they are on track with your retirement goals.

Seeking pension advice will help you to gain a clearer understanding of the different options available to you and ensure that you have the most effective retirement planning strategies in place for your personal circumstances.

At PensionAdvice.org we can help you find a FCA registered financial adviser for independent pension advice in Essex. The financial advisers we recommend offer bespoke pension advice in Essex on all aspects of pension and retirement planning.

Why Expats Should Consider a QROPS

Why Expats Should Consider a QROPS

By | QROPS UK | No Comments

If like a growing number of Brits, you have moved to another country seeking a new life in a warmer climate with a more relaxed lifestyle you may have a pension that is still in the UK. Many expats are unaware that they could be getting more from their UK pensions by transferring them to a Qualifying Recognised Pension Scheme (QROPS).

Transferring your UK pension to a QROPS can offer many financial and tax advantages for expats, to understand how you could benefit from transferring your UK pension to a QROPS it is advisable to seek advice from an independent financial adviser.

If you are an expat living away from the UK and are looking for independent pension advice, the financial advisers we recommend are experienced in pension planning and regularly work with expat clients to advise them on effective pension strategies and transferring their UK pensions to a QROPS.

Our recommended financial advisers will work with you to determine whether transferring your UK pension to a QROPS could be beneficial and will provide pension advice that is tailored to you and your unique circumstances.

Benefits of transferring your UK pension to a QROPS

The benefits you will receive from transferring your UK pension to a QROPS will vary depending on your unique circumstances. Working with a financial adviser with experience in expat pension advice and in particular QROPS advice will help you determine how you could benefit from transferring your UK pension to a QROPS, but could include:

Larger tax-free lump sum

A QROPS could offer a greater tax-free lump sum, you could take up to 30% tax-free cash with a QROPS compared to 25% from a UK based pension. For example, if you have a pension fund of £200,000 in a QROPS your tax-free lump sum could be £60,000 compared to just £50,000 if your pension remains in the UK.

Exchange rates no longer affect your pension income

If you transfer your UK pension to a QROPS, your pension will be paid in your local currency rather than in Sterling if you leave your pension in the UK. This means that your pension income will no longer be affected by unfavourable exchange rates and will give you more money for your retirement.

Simpler to manage

Consolidating two or more pensions into a single QROPS can make it easier and simpler to manage your pension fund and keep track of its performance. It will also reduce time spent on administration and paperwork. This could also help cut the costs of managing your pension funds, freeing up more income for your retirement.

If you have or are thinking of moving overseas you may be considering your options with regards to your pension and whether a QROPS UK pension transfer is the most effective solution for you.

Seeking advice from a QROPS pension specialist will help you to gain a clearer understanding of the different options available and ensure that the most effective retirement planning strategies are in place for your personal circumstances.

At PensionAdvice.org we can help you find a FCA registered financial adviser for independent QROPS pension advice across the UK. The financial advisers we recommend offer bespoke financial advice on QROPS UK pension transfers for British expats.

Making the most of your pension

Making the Most of your Pensions

By | Manchester | No Comments

Keeping track of your pensions performance and regularly reviewing your pension plan will help to ensure you are making the most of the opportunities available to you. Reviewing your pensions can help you identify any shortfalls that appear in your pension plan so clear action can be taken to overcome them.

Even if your pension savings are on track and performing well, it is still good practice to review your pension plan, as there could be steps you could be taking to build your pension pot further and achieve the income you want for retirement.

When reviewing your pensions performance and your pension plan it is advisable to seek pension advice from an independent financial adviser. Working with a local pension adviser will ensure you have the most effective pension planning strategy in place and can help you achieve your desired retirement income.

If you are living in Manchester and are looking for independent pension advice, the financial advisers we recommend are experienced in pension planning and regularly work with their clients in Manchester to provide independent pension advice, from planning to reviewing.

Our recommended financial advisers in Manchester will work with you to determine which pension plan is best suited to your circumstances and can provide pension advice to overcome shortfalls in your pension savings and help you make the most of opportunities available to you.

Tracking your Pensions Performance

It is good practice to check the progress of your retirement and pension savings at regular intervals, checking the progress of your pensions performance can help you identify any shortfalls in your pension plan and help you stay on track with your retirement goals. The earlier you identify a shortfall in your pension plan, the longer you will have to overcome it and ensure you have the income you want in later life.

Working with an independent financial adviser that offers pension advice, such as our recommended advisers in Manchester will ensure you are making informed decisions about your pension plan and could open opportunities that may otherwise not be available to you. Our advisers in Manchester cover all aspects of pension advice, including tracking pension performance and implementing new strategies to overcome shortfalls.

Making your Pensions Work Harder

If after reviewing your pensions you find they are performing well and are on target with your retirement goals, there could be ways you could make your pensions work harder to ensure you are making the most of your pensions and have a financially secure retirement. There are a range of ways you can make the most of your pensions, including increasing your savings and claiming available tax relief.

Increase your Pension Savings

Your financial situation from when you implemented your pension plan to when you review your pension plan is likely to have changed, which is why it is imperative to review your pension plan when there are changes in your circumstances, such as downsizing your home or paying off your mortgage.

Circumstances such as career progression and reduction in financial responsibilities, could mean that you are able to save more towards your retirement. Putting surplus income into a pension could be a tax efficient way of investing, not only would your additional contributions be topped up by the taxman, but if it is a workplace pension your employer may increase their contributions, depending on the rules of your scheme.

While the most important factor to consider is having enough income to have the retirement you want, making additional savings now could help you safeguard yourself against unexpected events in retirement and give you the financial freedom to achieve your retirement goals and provide financial help to your children and grandchildren.

Claim your Tax Relief

Higher rate taxpayers making pension contributions to either a workplace or personal pension will automatically receive basic rate tax relief on their contributions. However, they could be eligible for higher rate tax relief, but this would need to be claimed through your self-assessment tax return. Claiming additional tax could allow you to benefit from greater pension contributions and give your pension pot a boost.

If you are unsure if you are claiming all of your available tax relief on your pension contributions, it is advisable to seek the advice of an independent financial adviser.

At Pensionadvice.org we can help you find a FCA registered financial adviser for independent pension advice in Manchester. All of the financial advisers we recommend offer bespoke financial advice that is tailored to your unique personal circumstances.

What Happens to your Pension if your Circumstances Change?

What Happens to your Pension if your Circumstances Change?

By | Independent Pension Advice | No Comments

When planning for your future, things may not always go as planned and an unforeseen change in your circumstances can have an effect on your financial situation and your pension. Changes in your circumstances may include redundancy, divorce or parental leave. If unplanned changes do arise it is important to seek financial advice as soon as possible to ensure your pension plan adapts to the changes.

If your personal circumstances have changed or you are looking for independent pension advice in your local area, we can help you find the right pension adviser to help you with all aspects of pension planning and reviewing to ensure you have the most effective and efficient strategies in place.

Redundancy and your Pension

If you are made redundant your initial focus will be on finding a new job, and while you may receive a redundancy payment to help you cope financially, it can be a stressful time. If you are made redundant you will have several options with your pension, including:

  • You may be able to transfer your pension to a new scheme
  • You may be able to leave your pension in a workplace scheme and continue to make contributions
  • You may be able to use some of your redundancy payment to make additional pension contributions, this is known as a redundancy sacrifice

Before you make any changes to your pension when being made redundant it is advisable to seek independent pension advice to ensure you are making the best decision for your personal circumstances. If you decide to make additional payments into your pension, it could take you over the annual allowance and be subject to tax. An independent pension adviser will be able to provide advice on this.

Divorce and your Pension

While your pension may not be the first thing on your mind when divorcing your spouse, it is good to understand how your pension could be affected. As pensions can be included as assets in divorce financial settlements, it is imperative you have a good understanding of your pension entitlements and how they could be affected.

Without a good understanding of how your divorce might impact your pension, you could find your pensions benefits have decreased from what you expected to receive when you come to retire. It is good practice to seek independent pension advice if you are faced with a change in circumstances such as divorce.

Parental Leave and your Pension

If you decide to take maternity leave, paternity leave or adoption leave, you should remain a member of your workplace pension and contributions will be continued to be made by yourself and your employer. However, if you choose to stop your contributions, your employer’s contributions will also stop and you will be treated as having left the scheme.

If you are a member of a defined benefit pension scheme or a defined contribution pension scheme, periods of paid parental leave are treated as pensionable service and you will continue to accrue pension benefits. Your employer’s contribution should remain the same as before your parental leave, but member contributions will be based in actual earning during parental leave.

Extended parental leave that is unpaid doesn’t count as pensionable service, but you should have the option to make additional contributions when you return to work to cover this period where you were not contributing.

If you are planning on taking parental leave either paid or unpaid, it is advisable to seek independent pension advice so you are clear on any effects this may have on your pension pot and the options available to you under the rules of your pension scheme.

The financial advisers we recommend are experienced in retirement planning and regularly work with their clients to provide independent pension advice across the UK. Our financial advisers will work with you to determine which pension plan is best suited to your circumstances and can provide advice to overcome changes in your circumstances.

At PensionAdvice.org we can help you find a FCA registered financial adviser for independent pension advice in your local area. All of the financial advisers we recommend offer bespoke financial advice that is tailored to your unique personal circumstances.

Should you combine your pension pots?

Should you Consider Combining your Pension Pots?

By | Manchester | No Comments

If you have two or more pension pots you may be considering whether you would benefit from combining them into one pot. Combining your pension pots may make your pension easier to manage and track performance and in some instances you could get a better deal.

Many people are likely to have built up two or more pension pots from making contributions into workplace pension schemes at jobs they have had throughout their careers. While it is possible to have several smaller pots, it could be advantageous to combine your smaller pots into one big pot.

Before making any changes, it is imperative to seek independent pension advice to ensure you are making an informed decision that benefits your pension planning strategy. If you are looking for independent pension advice in Manchester, we can help you find the right pension adviser to help you with all aspects of pension planning and reviewing to ensure you have the most effective and efficient strategies in place.

Why Consider Combining your Pension Pots?

Making the most of your pensions now by combining them could have a significant impact on your retirement income and future financial security. While it may not be beneficial for everyone depending on the type of pension scheme they have, getting it right could mean a higher retirement income and the possibility of early retirement.

Making the decision to combine your pension pots is not an easy one, which is why it is advisable to seek independent pension advice prior to making any changes. Our recommended advisers in Manchester can provide pension advice to help you understand how combining your pension pots could affect your retirement income.

Combining your pension pots is achieved by transferring your pots into a single scheme, this can be a new scheme or one of your existing pots. It is important to understand any charges that may be incurred by your pension scheme providers when you transfer your pots.

There are many different options regarding defined benefit pensions and defined contributions pensions and how you can combine your pension pots, so it is advisable to seek independent pension advice to ensure you understand your options and how the will affect you.

If you have built up more than two pension pots and are considering whether combining them into one pension pot could be beneficial to you, here are a few questions you may want to consider asking your financial adviser:

How much will it cost to combine my pension pots?

  • Do my pension pots have to be of a certain value before I can combine them?
  • What are the advantages and disadvantages of combining my pension pots?
  • What are the advantages and disadvantages of keeping my pension pots separate?
  • How will combining my pension pots effect my pension plan?

The financial advisers we recommend are experienced in retirement planning and regularly work with their clients in Manchester to provide independent pension advice. Our financial advisers will work with you to determine which pension plan is best suited to your circumstances and can provide advice to overcome changes in your circumstances.

At PensionAdvice.org we can help you find a FCA registered financial adviser for pension advice in Manchester. All of the financial advisers we recommend offer bespoke financial advice that is tailored to your unique personal circumstances.

Finding the Best Pension for You

By | Independent Pension Advice | No Comments

When planning for your retirement you will want to make sure you have the most effective pension planning strategy in place to ensure you have a financially secure future, not only for you but for your family too.

One of the first steps in pension planning is deciding which type of pension you want. There are many different types of pension available and understanding the difference between them can be a challenge. Which is why it is advisable to seek independent pension advice to ensure you find the best pension for you.

Not only are there many different types of pension, the rules for each pension scheme can vary from provider to provider, make it even harder to determine which pension is a good fit for you. Working with an independent pension adviser will ensure the pension advice you receive is unbiased and focussed on your goals and objectives.

If you are looking for independent pension advice in your local area, we can help you find the right pension adviser to help you with all aspects of pension planning and reviewing to ensure you have the most effective and efficient strategies in place.

What are your Pension Options?

In the UK, there are many different types of pensions available. These types of pension will fall into one of two categories; defined benefit and defined contribution. Most of the options will depend upon what your employer offers during your career. Changes to pension legislation has given members more flexibility with their pensions than ever before.

Therefore, there are a number of important points you should consider if you are starting a pension or making changes to your current scheme. It is advisable to seek independent pension advice before making any changes to your pension plan. Below we look at defined benefit and defined contribution schemes in more detail.

Defined Benefit Pension Schemes

Also known as final salary schemes, defined benefit pensions are not generally available to new employees and are generally offered by older, more established organisations. The pension income amount in a defined benefit pension scheme is determined by:

  • Length of time the member has been in the scheme
  • The member’s final salary or salary average (depending on the rules of the scheme)
  • The accrual rate – the defined proportion of your earnings when you retire according to the length of your membership

One of the biggest benefits of defined benefit pension schemes is that they offer increased financial security which is not dependent on investment returns.

Defined Contribution Pension Schemes

Self-invested personal pensions (SIPPs), money purchase occupational pensions and stakeholder pensions are all types of defined contribution pension schemes. They work by the pension member building a pot to provide an income throughout their retirement. The final amount is not defined and is determined by the amount of money contributed to the pot and the investment performance.

While rules may vary from scheme to scheme, most defined contribution schemes work by the member and their employer making regular contributions to build a pension pot. This money is then placed in other investment options such as stocks and shares. While the aim is to grow the pot, there is a risk that the pot value could decrease if there is an uncertain financial market.

Once members reach the age of 55 they can access their pot and would be able to:

  • Withdraw 25% of pension pot tax-free
  • Withdraw the remaining 75% as a taxable lump sum
  • Buy an annuity
  • Take flexible benefits
  • Use a combination of all options

To help you decide which type of pension is best suited to you and your requirements it is recommended you seek independent pension advice to ensure you are making an informed decision and are receiving advice that is tailored to you and your circumstances.

The financial advisers we recommend are experienced in retirement planning and regularly work with their clients to provide independent pension advice across the UK. Our financial advisers will work with you to determine which pension plan is best suited to your circumstances and will provide sound retirement planning advice.

At Pensionadvice.org we can help you find a FCA registered financial adviser for independent pension advice in your local area. All of the financial advisers we recommend offer bespoke financial advice that is tailored to your unique personal circumstances.

A Guide to Ill Health Retirement

By | Manchester | No Comments

If you can no longer work due to ill health you may be able to take your pension benefits early, this is known as taking an ill health pension. Depending on the rules of your pension scheme, this can apply to those under the age of 55.

Each pension scheme will have its own rules on what ill health or sickness means, but typically you will be considered for an ill health pension if you are unable to carry out your normal job due to physical or mental illness. In the instance that you are terminally ill and have less than a year to live, you may be able to take the whole of your pension pot as a lump sum and special tax treatment may apply.

Usually, when you reach pension age you can take 25% of your pension pot as a tax free lump sum and the remaining 75% would be taxable. However, if you are terminally ill you may be able to take all of your pension pot as a tax free lump sum, if all of the following apply to you:

  • You are expected to live for less than a year due to ill health
  • You’re under 75 years of age
  • Your pension pot does not exceed the lifetime allowance amount of £1 million

The rules on special tax treatments will depend on the rules of your scheme, it is advisable to seek independent pension advice to clarify what your entitlements are and ensure you are taking the best course of action if you are considering taking an ill health pension.

If you are looking for independent pension advice in Manchester, we can help you find the right pension adviser to help you with all aspects of ill health pensions to ensure you have the most effective and efficient strategies in place.

Taking Ill Health Retirement

If you meet the criteria of your scheme for taking ill health retirement you may be able to take your pension benefits early. As you will be taking your pension benefits early, it is likely your pension pot will be less than expected if you had continued to work until retirement age, but if special tax treatments apply to your circumstances this could help reduce the effect on your pension amount.

Taking ill health retirement will be unavoidable and unplanned, while many will plan for their retirement not all will consider how ill health could affect their retirement or pension. Working with an independent financial adviser can help you plan for the unexpected before it is too late and they will be able to advise on the best strategies for protecting you and your family should ill health affect your circumstances.

The financial advisers we recommend are experienced in retirement planning and regularly work with their clients in Manchester to provide independent pension advice. Our financial advisers will work with you to determine how ill health retirement will affect your pension and advise on the best course of action.

At Pensionadvice.org we can help you find a FCA registered financial adviser for independent pension advice in Manchester. The financial advisers we recommend offer bespoke pension advice in Manchester that is tailored to your unique personal circumstances.