Pension Commencement Lump Sum
Let’s make this easier - a Pension Commencement Lump Sum (PCLS) is a complex way of saying “tax free cash”.
When you reach your retirement age, currently 55, you can take up to 25% of your pension fund as a lump sum. This is tax free.
What can you use it for?
Spend it, clear the mortgage, save it or invest it. This cash injection can be a great boost to your retirement lifestyle. The only ‘off-limits’ investment is you cannot put it into another pension plan.
Things to watch for
Taking a lump sum will significantly reduce the value of your pension fund. Make sure you seek some independent specialist advice to see how this will affect your future income.
Annuities - what are they?
Open market option