One of the most common questions asked by people who are thinking about taking cash from their pension, is the question of: “Can I Still Work & Withdraw From My Pension?”
There are also questions such as “Can I work and still contribute to my pension and still withdraw from my pension?”
“Can I withdraw my pension at 55 and continue to work and contribute to my pension?”
The answers to all three questions is: Yes. This is possible, however there is more to this that you need to be aware of (read below).
1/ You can work and still contribute to a pension, this is possible.
Read below for more detail.
2/ You can work and withdraw money from a pension.
Nothing is in place to stop you working and withdrawing money from your pension, principally, you could have money going into your pension and take money out of it at the same time, but the government have introduced factors into this of which you need to be aware.
If your pay is going into your pension then you’ll be restricted to making pension contributions of £3,600 a year if you want to get tax relief on the contribution.
This means that you’ll be able to pay a maximum of £3,600 per annum into your pension if you are taking a retirement income. If you are using a pension drawdown scheme then you will be able to contribute £10,000 to your pension per annum.
3/ You can withdraw your pension at 55 or over and still do all of the above.
Your age is only relevant in context to this in that you can only legally withdraw or release your pension in the conventional sense over the age of 55.
Recycling money through a pension can be attractive due to the fact that there is a certain amount of tax relief, also because you can save money on national insurance, but be aware of the above restrictions concerning contributions and pension withdrawal.
It is important to read and digest the above information before making decisions in relation to your pension.
The take away message is that yes: pension withdrawal is possible alongside the continuation of your normal working occupation, but with the above restrictions in place.
For more information about pension release and/or possible alternative investments that could be available to you get in touch with us for a free pension review.