Retirement annuity
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.
![Savings for Retirement, Income in retirement, Retirement Annuity, Investment, Preservation Fund, Retirement Planning, Savings for Retirement, Living Annuity, Performance Two pot calculator](/_next/image?url=https%3A%2F%2Fimages.ctfassets.net%2Fyqvz0zwovkbq%2FVXr66OmXVPeLkFQqt72S7%2F5a1ca289f2d9c31135fdc0fbd3420311%2F2-pot_1400_CTA.webp&w=2048&q=75)
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.
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