Frozen Pensions Over 55
We have been receiving a high number of enquiries from customers wanting to know what options they have to unlock a frozen pension before 55, while other customers ask ‘can I cash in my frozen pension at 55’? Some people just want to know how they can find a frozen pension.
Fortunately, the advisors we work with are experts when it comes to frozen pensions, more accurately called ‘dormant pensions’.
We have put together a dormant pension guide on what is possible both before and after reaching 55 years of age.
What are my frozen pension options at 55 and over?
At the age of 55 and over you have all the possible options available to you for your frozen pension, you could:
Transfer them into your current personal pension plan
If you already have an active personal pension plan you are able to transfer any frozen pensions you may have into the active pension.
Set up a new personal pension including the frozen plans
You are able to have as many personal pension plans as you like, so an option could be setting up a brand new plan to transfer as many frozen pensions into as you want. If a new plan is something you are considering, seek advice from one of the dormant pension specialists we work with, who will be able to give you the best advice for your circumstances.
Buy an annuity
An annuity provides a guaranteed income for either a set number of years or for the rest of your life – whichever you choose. Remember you are able to take a 25% lump-sum tax-free and then reinvest the remaining 75% with an annuity for a monthly income.
Can I cash in my frozen pension at 55?
Yes, if your dormant pension has the Pension Freedom provisions. Typically, pensions taken out before 2015 don’t have this provision so it may be necessary to transfer to one that does.
In addition, older pensions only allow the option to buy an annuity at retirement, so there may be no access allowed before then and your options are limited.
You can, however, transfer the pension at retirement. It is advisable to get an advisor to check your existing pensions to see if they have access to Pension Freedoms. At the same time, they can check the pension’s performance, as this also may be a driver for transferring if it is performing poorly.
To get the best advice for your circumstances speak with a pensions expert, like the ones we work with. Call 0808 189 0463 or make an enquiry.
What are my frozen pension options under 55?
If you’re looking at releasing a frozen pension before 55 then you have a number of options open to you including:
- Transferring to another pension
- Setting up a new pension
- Buying an annuity
- Cashing in the pension (not recommended for the reasons below)
Can I cash in my frozen pension under 55?
In reality yes. Many pension providers could allow you to unlock cash from a frozen pension before 55
Although this could well be a possibility, it could also be costly, as you wouldn’t be entitled to any tax breaks, and would be hit with a significant tax bill from HMRC, of up to 55% and to add insult to injury, there is a good chance you would get some hefty admin charges from the provider for releasing the frozen pension before age 55.
If this is something you are considering it would be prudent to speak with an expert pensions advisor, like the ones we work with to get the best advice for your circumstances.
Speak to a dormant pensions expert
If you have questions about frozen pensions or your options pre or post age 55 and want to speak to an expert for the right advice, call Online Money Advisor today on 0808 189 0463 or make an enquiry. The advice they give is free and without obligation.