So, you’ve taken out a personal pension plan and have been contributing to it for a number of years, even decades. The pot has grown substantially over that time.

Now, with retirement fast approaching, you want to tap into your investment. But what are the conditions?

In this series of articles aimed at demystifying the world of pensions, BOV Manager within the Bancassurance Office Claire Falzon has explained what private pensions are, delved into pension adequacy, how you can get one going, the attractive tax rebates offered on one’s contributions, the flexibilty on offer, and the benefit of having a unit-linked pension plan.

Claire Falzon

Here, she discusses the options available for those wanting to make use of their investment.

“The scope of long term saving in a pension plan, is to finally come to enjoy the benefits at retirement. #

“Current rules allow for some flexibility when it comes to deciding the age at which an individual may access the accumulated sum of money.

“In fact, independent from one’s statutory retirement age, the benefits phase may be triggered at any time between the age of 61 and 70.

“Once this phase is initiated, there is the option to withdraw up to 30 per cent of the value of the policy account as a tax free lump sum.

“The remaining balance will be paid in monthly installments which may be taxable according to an individual’s tax position. These payments are meant to be distributed gradually to supplement the state pension.”

An Expert Explains is a initiative to improve economic financial literacy by inviting industry leaders to explain technical terms in a manner that can be understood by a general audience. If you would like to suggest a term or concept for our network of professionals to break down, or if you are an expert willing to contribute to this column, send us a message on our Facebook Page.

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