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Pension products must only be used for the accumulation of funds
to provide an income on retirement.
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Governing legislation does not provide the flexibility to enable
the pension scheme to act as a savings contract i.e. once contributions
are paid in, they are inaccessible and may only be taken as pension
(or pension and cash) at retirement.
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The most essential use of the products is to top up inadequate
State Pensions.
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The tax free cash element may provide cash at retirement to repay
loans or any number of other uses.
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Certain circumstances may prove problematical in pension planning
terms:-
- Scheme members whose salaries exceed the earnings cap.
- Scheme members who have only a short time to go before retirement.
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In the above circumstances, planning will need to be supplemented
by other investments