How to get pension payout early???

Discussion in 'Pensions' started by kerryberry, Jul 21, 2010.

  1. kerryberry

    kerryberry Guest

    My husband has some money tied up in a pension fund that doesn't mature until he is 65. The problem is that he could really do with having this money now to invest in a new business venture as we are pretty broke! I know it's a bit vague but does anyone know if there's any way to cash it in or break the contract so to speak...??
    Thanks
     
  2. aristotle

    aristotle Frequent Poster

    Posts:
    564
    You can't get the money out early as far as I know unless there are very exceptional circumstances. I think for example if someone had an illness where they cannot work.
     
  3. LDFerguson

    LDFerguson Frequent Poster

    Posts:
    3,879
    How old is your husband? Certain types of arrangement allow you to take early retirement from age 50.
     
  4. kerryberry

    kerryberry Guest

    Thanks guys. Unfortunately he's only 42 so we'll have a while to wait then...!
     
  5. droileen

    droileen Frequent Poster

    Posts:
    114
    You must get the permission of the Revenue to gain early access to a pension fund - they will be able to advise you further on the possible acceptable scenarios etc.
     
  6. airgead07

    airgead07 Frequent Poster

    Posts:
    167
    LDFerguson is correct ,can only take early retirement and draw down the benefits from age 50. Must be for reasons of ill health is under 50.
     
  7. CRESPO

    CRESPO Registered User

    Posts:
    16
    Assuming a person reached 50 and was entitled to cash in his pension as described by kerryberry to invest in a new business venture that means that that person is not actually retiring but continuing to work in his her new business. So are they still entitled to earn an income from the business in addition to drawing their pension entitlements ?
     
  8. kerryberry

    kerryberry Guest

    Interesting question Crespo...
     
  9. Homer

    Homer Frequent Poster

    Posts:
    349
    Unless you are in a profession where the Revenue allows an earlier retirement age than 60, you can only retire at 50 if your pension is through an occupational pension scheme and the rules of that scheme permit retirement at age 50.

    If it's a defined benefit scheme, there's a strong likelihood that you won't be able to take early retirement because of solvency issues. Even if it's defined contribution, it is likely that you will only be able to take part of your pension as a tax free lump sum (depends on how much is in the fund, your salary and how much service you had with the employer).

    Having said all that, if you are able to draw your lump sum at 50, there's nothing to stop you using that money to set up a business and keep working.
     
  10. Markjbloggs

    Markjbloggs Frequent Poster

    Posts:
    380
    What are the other consequences of taking a pension early?
     
  11. Homer

    Homer Frequent Poster

    Posts:
    349
    Assuming you are allowed to take early retirement, the main consequence is that it will tend to be somewhat less than you would have received if you had waited under normal retirement age. Also, if you are still working, you may end up paying a higher rate of tax on the pension than you would have paid if you had waited until NRA.