Anyone approaching retirement age, pension into a lump-sum (also known as the initial lump-sum pension) may seem like a highly attractive option. It is also free to use any funding, but I always think carefully before a final decision. The bad option now also hurt the pension.
The existing legislation is possible that the pension is tax-free lump sum up to 25 percent after the crystallization. However, in most cases, this return to a slightly lower income. This can be used for any purpose. For example, you may invest it for a better return than the annuity. You can help the kids that the way to the first call from the house ladder.
Alternatively, can only be used to want to finance that holiday of a life is still awaited. Have worked all your life, you deserve it. Taking a lump-sum pension is now often a lifestyle choice than a financial one - into an immediate profit at the expense of long-term. However, before you make up your mind you should always seek professional financial advice.
The rules are flexible. You may be the pension lump sum at any time after the age of 55. Attractive for those who want to use the money as long as they are healthier and in better shape to enjoy it. If you find an attractive investment opportunity that is not only much more flexible than a pension, but provides a higher return.
However, there are significant drawbacks. First of all, may significantly reduced annual pension. Most people are willing to pay to the faith and is currently exempt, may be worth, but when many workers enrolled in employer pension schemes faced a significant decline on the revenue impact on retirement income may be higher than many expect, especially where guaranteed annuity prices.
There are advantages to taking a lump-sum pension, retirement, did not actually take a pension either, but should carefully consider your situation and options before the decision. Many people do not realize the seriousness of the problem may seem. There is never a time in your life that are fundamentally sound financial advice. Decisions I knew that comfortably filled the pensioner.
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