Citizens’ Advice can help protect your pension pot

That new car buy might not be the best option!
That new car buy might not be the best option!

The UK government has made some big changes to the pension system which will give some people the option of cashing in their pension before retirement age.

These changes affect you if you’re 55 and over, and have a pension based on how much has been paid into your pot (a defined contribution pension).

You are also entitled to free guidance to help you understand what the options are and how your choices may impact financially, for better or for worse.

The CAB has the task of providing this guidance, so we are now welcoming local people who want to discuss their options under the new system. As well as the above question, I also expect we will be asked questions such as, “Can you advise me what I should do?”.

While the questions are clear, the answers are not.

It very much depends on your plans for retirement, your current circumstances, your future circumstances , your needs and your expectations.

For some, accessing this money will be liberating, particularly if they have a large pension pot, enabling them to do things they would otherwise not be able to.

So what are the cons? The obvious one is the potential for a big tax bill. The less obvious is that should you be unfortunate enough to rely on means-tested benefits e.g. Jobseekers Allowance, Employment Support Allowance, Pension Credits, Housing Benefit, Council Tax Reduction etc. then any savings you have could reduce your award or stop you claiming benefit at all.

Then there is the potential for scams, as unfortunately, there is never a shortage of criminals willing to help you part with your money.

This is why the CAB agreed to provide the guidance as it is vital for you to be as well informed as you can be on how your choices could impact on your day-to-day finances and the potential implications of any decisions made.

The guidance we offer will be provided by a fully trained and accredited Pension Wise guidance specialist.

We won’t tell you what to do with your money or recommend a particular product. But we will explain the changes to you and give you all the information you need to help you understand your choices and their potential implications.

To access this advice go to a CAB office, call the Pension Wise number, 0300 123 1047, or visit