Hello,
I have 4 workplace pensions from my current and former employers, which they and I have contributed to.
I now want to combine the 3 older ones and since I'm over 55, to draw down enough money to pay off most of the remainder of my mortgage, after which I plan to increase my contributions into my current 'live' pension, benefiting from the tax breaks that offers (sadly I can't afford to retire).
I'm looking to consolidate the 3 older pensions into the best performing one, which coincidentally also has the lowest annual fees.
This seems like such a no-brainer to me that I'm wondering if there is anything I should watch out for - any traps I may fall into?
I'm aware that you can only withdraw up to 25% tax-free and I won't be withdrawing higher than the value limit.
The above is what I want to do, but I've been advised that to consolidate them and THEN withdraw the cash tax-free, would take a fair amount of time (estimated at least 5-6 weeks), so at the moment I plan to first withdraw from the pensions I am no longer paying into - and I have checked to ensure that I will not incur charges for doing so.
As I understand it from discussions with 2 of my pension providers, when I withdraw cash, at that point I will need to change the pensions into a financial vehicle to pay an income at retirement.
Have I understood correctly?
My intention is to continue growing these inactive pensions, so if I can't continue with the pensions and their reduced balances, what is the best course of action?
Thanks.