Question:
I have invested my pension from a previous employer and I am in desperate need of the money now. I am not yet 55 years old and was told that I cannot make a withdrawal because of the rules of the transferring fund. My former employer when into liquidation and I do not understand why I cannot get access to the money now. Please advise.
Answer:
Anita,
It is not clear to us where you have invested your pension money. If it is into a preservation fund, you are allowed one withdrawal before retirement. If it is into a retirement annuity, you have to wait until you turn 55 to access it. If it is into your new employer's fund, you can only access this money on retirement, or on leaving that employer. The reason your access is restricted is because your savings are tax-incentivised. The state does this to encourage you to save for retirement. It does not want to offer tax incentives, have people benefit from these, then pre-spend their savings, and fall back on the state for help when they do retire.
