What are the consequences of canceling my retirement annuity?

Life doesn't always go according to plan. If you're thinking about stopping your retirement annuity (RA) contributions, we understand – and we're here to help you understand your options.

Understanding Your Options

Keep your investment working: The "paid-up" option

Even if you can't contribute right now, your retirement savings can keep growing. Making your RA "paid-up" means your existing investment stays in the market, continuing to benefit from compound interest. The best part? You can restart your contributions whenever your situation improves, and you won't face early withdrawal penalties.

Emergency access through the two-pot system

From 1 September 2024, the new two-pot system will give you more flexibility with your retirement savings. You'll be able to access a portion of your savings once per year if you face a genuine emergency. However, it's important to understand that any withdrawal will be subject to income tax and will reduce your future retirement income.

Wait until retirement

If your circumstances allow, waiting until retirement age (from 55) to access your benefits is your most powerful option. Here's why:

• Your investment gets the full benefit of compound growth over time
• You maintain all your tax benefits
• You'll have more flexibility under the two-pot system
• Your retirement lifestyle won't be compromised

Making Your Decision

Before making any changes to your RA, consider adjusting your monthly contribution instead of stopping completely. Even a reduced contribution helps maintain your retirement planning momentum and keeps your investment growing.

We understand that financial decisions like this aren't easy. Our investment consultants are here to discuss your specific situation and help you understand how different choices might affect your retirement journey.