Sell Pensions

To sell pensions isn’t technically accurate, generally the term is confused with that of pension release. If to sell pensions is a confusion of the meaning of pension release though, what is its meaning? This article will give you things to consider before you decide to sell pensions.

Pension release (i.e. to sell pensions) is where a person who owns a pension fund is able to take benefits from their selected pensions before they reach their retirement date. However, there are limits on who can take pension release as you must be at least aged 55 (this used to be age 50 but changed in April 2010), you cannot take benefits from a State Pension and some final salary schemes do not allow you to sell pensions if you are still an active member. Additionally, if you wish to sell pensions you must not already be in full receipt of the benefits of the pension you wish to release as these funds will be considered crystallised.

Considerations when you sell pensions

However you should note that pensions are predominantly designed to be taken in retirement to provide you an income . The Financial Services Authority recommend that you should consider carefully if you do need to sell pensions as it may harm your income in retirement.

If you do decide to sell pensions then you will be able to take up to 25% of your pension fund as a tax free cash lump sum which you may reinvest in another investment or use in any other way you desire. Once you sell pensions, however, you will need to transfer your pension fund to another arrangement where it will be reinvested and can either continue to grow until you retire or you may take an income from it. Alternatively, you may, should you desire to sell pensions, hold to an insurance company and purchase an annuity with it.

To sell pensions then may also have slight confusion with that of purchasing annuities where effectively you do sell pensions to an insurance provider which will then be exchanged for annuity payments for the rest of your life.

Limitations to sell pensions

Several factors are taken into consideration by annuity providers when you purchase an annuity from them such as annuity rates at the time you take one, your gender, state of health, age and various other factors. In return for when you sell pensions to the providers, the insurance companies will offer you guaranteed rates (with varying limits depending on different terms you choose) that will provide you an income for the remainder of your life.