It is possible to take benefits from an individual annuity from the age of 55. Prior to 6 April 2010 the minimum age was 50. Up until 22 June 2010 members were required to get a pension or organize an otherwise secured allowance (ASP) before they reached their 75th birthday. The government then announced a cap on what it called the effective need for compulsory annuitisation at age 75. After the intervening period, in which interim rules applied (the age for compulsory annuitisation was increased to age 77), it has from 6 April 2011 introduced new rules that remove the need to buy an annuity at any age with the planholder able to start annuity drawdown as an alternative and take withdrawals straight from the fund.
There are two scenarios in which an affiliate may take benefits before the age of 55.
Some private annuity/stakeholder schemes and retirement allowance policies will allow members to draw benefits before the age of 50 because they are in a special occupation – professional footballers, as an example.
There are many supposed cash in pension early plans that are decisively sold on the web. Almost of these are universally considered illegal, in default of the annuity rules or maybe stings.
Individuals could have been members of such a project, or customers, at 6 April 2006 for this facility to apply. As long as benefits are taken in full from the scheme at the allowed lower age, then the facility will remain. The member’s lifetime allowance will be reduced by 2.5 per cent for each complete year before the standard minimum pension age that the benefit is taken. If a advantage/benefit were to be taken in 2011 by a professional footballer aged 35, the decrease in his lifetime allowance would be 50 per cent (20 years x 2.5 %). Further annuity rights may accrue but the individual in this example would only be well placed to use the remaining 50 % of his lifetime allowance for the purposes of amassing further tax-privileged savings.
Great care ought to be taken if you are considering a plan that allows you to draw down from your pension sooner than your 55th birthday, and you should usually seek skilled advice.
If you have any questions regarding pensions or financial advice, it is always recommended to seek expert fianancial advice from a financial adviser, who can put you on the right path for your financial future.
Author: Aharon DeansThis author has published 15 articles so far.