Early retirement (ill health) self employed personal pension

[Netty1]

Hi,

Forgive my lack of knowledge - I'm enquiring on behalf of my self-employed partner who's about to draw down his personal pension due to ill health. The form he has received for the draw down is difficult to make out and he's taking it to a financial adviser (wisely).

His plan matures at 60 I think and he is 57. Due to his illhealth, a few debts have built up and the more cash he can access to clear these, the better. As far as we can make out, he can only get a 25% tax free lump sum now. My question is, what happens to the remaining 75%? I think there are options on the form to reinvest or leave the remaining 75% with Ark Life but how long before he can access the 75% and can he do so as a lump sum or does it have to be in weekly payments? And whenever it does become available to him (either as a lump sum which is preferable or weekly payments) will that sum be taxable?

Apologies again if I haven't been clear, neither of us are too well up on pensions and would welcome any advice as it seems to be a bit of a minefield.

Thanks in advance

 

[Steven Barrett]

He can get 25% tax free. With the remainder:

1. Purchase an annuity with is payable for the rest of his life.
2. Invest in an ARF
3. Take it as a lump sum and pay tax on it

Under 2 & 3, if he does not have guaranteed pension income of €12,700, he must invest €63,500 in an AMRF until he is 75. He can only draw down 4% of this each year. Alternatively, he can purchase an annuity for the €63,500.

He doesn't have to keep it with Ark Life either.


The financial advisor he is going to see will tell him all of this.


Steven
www.bluewaterfp.ie

 

[Conan]

But if the pension is a Personal Pension (RAC) then retirement prior to age 60 can only be on grounds of serious ill-health.