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Pension withdrawal whilst on PTD

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(@jimbosedici)
New Member
Joined: 4 months ago
Posts: 1
Topic starter  

Hi , looking for some clarity on a pension issue, I have been in a PTD for some time now , end date is may 2026 I think. 

My question is as next year I turn 55 and am eligible  to withdraw from my pension should I wish too, I have a car that I've had for many years and now its bearing the end of its life  , could I take money out of my pension to replace it with another ( I'm not talking about anything flash , just a tool to take me back and forth from work as I live rural ) would this be allowed?  I wont be able to get credit for obvious reasons to do this and if I xant get to work I cant pay my trust deed .

Any help is appreciated. 

Thanks in advance 


   
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Annmarie Macdonald
(@annmarie-macdonald)
Member Admin
Joined: 2 years ago
Posts: 40
 

Pension Lump Sums

Lump sums from pensions get treated as income. This money has no special status in a Scottish trust deed.

Your trustee has an interest in received pension lump sums. The money can get used to repay your creditors.

A Protected Asset

Money kept within an approved pension fund should be safe. This is not an asset that your trustee can usually access.

This changes if you take this money out of the pension fund. Your trustee will treat it as income. The money is likely to get used to repay your debts.

Using Pension Lump Sums To Settle Debt

A pension lump sum could get used to clear your debts. This might involve repaying them in full. It might involve agreeing reduced settlements.

If this gets done informally, you might avoid personal insolvency. A trust deed is a type of personal insolvency. Savings might be made. You could be debt free sooner.

A trust deed could get funded by a single pension lump sum. This is complex and will not be available to everyone.

Your trust deed could get ended early using a pension lump sum. The debt, interest, and costs must get fully repaid. This could be expensive.

Take advice before using pension funds to settle debts. They’re usually a protected asset in insolvency. You will rely upon this money to fund your retirement.

Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds


   
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