Ideas for Investing a Pension Lump Sum
Most pensions will provide a pensions lump sum, the amount of which will depend upon the type of pension plan you have.
Personal pensions and stakeholder pensions will generally allow up to 25% of the accumulated fund value to be taken as a pension lump sum and this amount will be tax-free.
The amount of the lump sum from an occupational pension is likely to be dependent on a number of factors including your salary at retirement and the number of years of service with the employer.
Many pension investors use their pensions lump sum for a one-off purchase or, alternatively, the pensions lump sum can be invested to supplement income in retirement.
A Self Invested Personal Pension (SIPP) may be an investment option for some people to enable further investment in your pension, while receiving the tax relief available for pension saving.