Which? How to access your pension
Dec 5, 2024
Jenny Ross, the Which? Money editor, and Tom Selby, Director of Public Policy at AJ Bell, explore the critical decision of accessing your pension. They break down the intricacies of annuities versus pension drawdown, discussing the benefits and risks of each method. With insights into the evolution of pensions since 2015, they emphasize the importance of comparing rates and providers. Listeners gain valuable advice on navigating pension options, understanding associated costs, and making informed retirement planning decisions.
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Identify Your Pension Type
- Determine your pension type by checking your employment history.
- If you didn't work in the public sector, you likely have a defined contribution pension.
Early Pension Access
- Private pensions can be accessed earlier than the state pension age.
- Defined contribution pensions have a minimum access age of 55, rising to 57 in 2028.
Consider Early Access Implications
- Carefully consider accessing your pension in your 50s due to longevity and tax implications.
- Withdrawing early means lower annual income and triggers the Money Purchase Annual Allowance.