A question we are asked quite often is – “When can I mature my pension?”
Certainly, it is always best not to mature any pension until you actually retire. However, there are many circumstances when early access might be needed. By example, if you choose to work part time and want to access a pension to supplement your income. There are many situations where an individual might need need access to the tax-free cash element of their fund, for any number of reasons and it is important to know your options.
When you can access your Pension will very much depend on the kind of pension you hold, with a brief summary as follows:
Personal Pension
The earliest you can draw down on a Personal Pension is age 60, regardless of whether you continue to work or not.
Company Pension #1 – where you NO LONGER work for that Company/Employer
Where you have left the employment of a company, the earliest you can access that pension is age 50. Again, regardless of whether or not you are working elsewhere, former employer pension schemes can be matured from age 50 onwards.
Company Pension #2 – where you STILL work for that Company/Employer
While you still work for that Company, and still contribute to that pension, it cannot be matured. However, where contributions have ceased and no further payments are being made, yet you still work for that Employer, it is possible to mature the pension from age 60 onwards. A few tweaks to your benefits might be needed, but technically, it is possible to mature your benefits once you have turned 60.
Buy Out Bonds / Personal Retirement Bonds
These are pensions that are linked to a former Employer/Company Scheme that you were once a member of. Where you have left the Company, you can transfer your pension benefits into a BOB / PRB in your own name personally. If an old Scheme is being wound up, the Trustees can transfer the pension to a BOB / PRB in your name. As you no longer work for that employer, the pension can be matured from age 50 onwards.
Regardless of when you might want to mature a former Employer Pension, we regularly give advise on whether or not to transfer previous employer pensions over to you personally, for more control and more investment choice over your own benefits.
PRSA #1
Age 60 is normally the earliest you can access a PRSA, whether you continue to work or not. Where you Employer is contributing to your PRSA, technically it is still possible to mature that PRSA and replace it with a new account, if you and / or the Employer still want to contribute to a pension on your behalf.
PRSA #1
If you were a member of an Employer Sponsored PRSA and you no longer work for that company, you can access the pension from age 50 onwards, regardless of whether you continue to work elsewhere.
This is of course only a summary of the main rules, which cover almost all circumstances. In the event of a potentially terminal illness, exceptions can apply that could allow earlier access.
If you have a question about your own Pension and would like to review your choices in more detail, please feel free to contact us, even if only to answer any queries you might have.
Conor
Insight Life Pensions & Investments
065 6840422