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Pensions
By Mike Freer, of BWCI
MY wife and I are both hoping to retire at the end of the year and we’ve started to make enquiries about our pensions. We’d like to take as much in cash as possible to help our children with house deposits. We’ve got a few different pensions from Jersey and the UK and most of the quotes say we can take 25% in cash, but one says 30%. Might that be an error?
I’m not surprised you have quotes with both 25% and 30% lump sums.
In Jersey the maximum tax-free lump sum at retirement is 30% of the value of the pension. It increased from 25% a few years ago.
However, not all Jersey schemes will have updated their rules to allow this and so some may well still be limited to 25%.
The position is different for a UK scheme. Here, the maximum lump sum is 25%. Therefore, assuming that the quote with a 30% lump sum is a Jersey pension arrangement, it is likely to be correct.
However, just a word of caution. Although taking the maximum lump sum is very appealing and flexible, do remember that it will reduce your retirement income considerably and so make sure that you will have enough to live on comfortably in retirement, before funding your children’s property purchases.
