What are the consequences of canceling my retirement annuity?

It's important to note that you can't technically "cancel" a retirement annuity (RA). However, you can stop contributing to it.

Here's what you need to know:

What happens if I stop contributing to my retirement annuity?

If you're facing financial difficulties or unemployment before reaching retirement age, you have several options:

Make your RA "paid-up":

• You stop contributing, but your money remains invested.
• Your retirement savings continue to grow, though potentially at a slower rate.
• You avoid early termination charges that some older RAs may have.

Access your savings component (two-pot system):

• From 1 September 2024, you can access funds from your savings component once a year.
• This option is for emergencies, and is not intended for lifestyle enhancements.
• Remember, any withdrawal reduces your future retirement income and is subject to income tax.

Wait until retirement age:

• You can access your full retirement benefits at retirement age (usually 55 or older).
• Under the two-pot system, you'll have more flexibility in how you use your retirement savings.

Important considerations:

• Early access to retirement savings should be a last resort. It significantly impacts your long-term financial security.
• Tax implications and fees may apply to any withdrawals from retirement products.