Introduction
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If you have a
question to which you cannot find an answer in the pensions guide
then please fill in a Frequently Asked Question (FAQ) request form.
If we think your question is likely to be a popular one we will add
it to either the FAQ section of the site or incorporate it into the
pensions guide. We can not promise to answer every question posted
but if we do answer one then we will try and let you know where to find the
answer via email.
If you require individual
financial advice then click here to be contacted by a qualified
financial adviser.
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FAQ as of 07 August 2008
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Q1 - Borrowing money - Can I
borrow money from a pension fund or against the value of a pension
fund?
A1 - Money cannot be taken out of
a pension fund before the age of 50 (except in some special
circumstances) therefore it cannot be borrowed from the fund. If you
wanted to release some money after age 50 then around 25% of the
fund could be taken as tax free cash with the remainder being used
to secure a regular income.
It would be up to the lender
whether they would consider your pension fund as adequate security
for a loan although as the lender would have no way to access the
funds if you were to default on the loan I do not see this as being
viable.
Q2 - How much can I pay into an individual pension?
A2 - The maximum % of salary you
can currently pay into any pension schemes if you are a member of a
company scheme is 15% of your total gross income. Some company Money
Purchase schemes will be setup so as to allow you to pay more based
on the limits than apply to Personal Pensions.
Personal pensions and stakeholder
pensions have age related contribution limits. These are detailed in
the pensions guide here.
The Inland Revenue has announced
that the rules will change from April 2006. The maximum
contributions may then be raised to around £200,000 per year which
is likely to be more than enough for most people!
Q3 - I do not want to pay into my pension anymore can I "cash it in"?
A3 - You cannot take any cash
from your pension before you are aged 50 except in special
circumstances.
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Read the guide to
investment in the pensions guide. It explains what you need to
think about before investing for your retirement.
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Use our online calculator
to get an estimate of your basic state pension.
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