Alternatives for those who want to access their pension

Mr McQueen says from April 2015 the new retirement options come into effect. This will transform the options available to those aged 55 and over - but with freedom and choice comes responsibility.

Mr McQueen says those aged 55 and over should continue to consider their options carefully.

Ultimately David Trenner, technical director of Intelligent Pensions, says the first thing to do is to get the client to consider whether they really need the money.

He says: “Maybe they can manage without whatever they are thinking of buying, or if they have already incurred the debt the lender may be prepared to offer monthly payment terms.”

There may be lenders also prepared to offer secured loans at reasonable interest rates, he says. Otherwise Mr Trenner says it may also be possible to raise money from other assets.

If the clients is 55-years-old already, Mr Trenner says they might only have to wait until April to take advantage of the new legislation that was announced in this year’s Budget.

The 2014 Budget, announced major changes to the way individuals can access their pension savings which come into force on 6 April 2015.

Individuals will be able to access their pension fund in full at age 55 or over through an authorised pension scheme, says Helen Dreyfuss, pensions technical specialist of The Pensions Advisory Service.

The tax free lump sum of up to 25 per cent of the fund will remain available with any balance being taxed as income and taxed at the individual’s marginal rate.

Currently individuals who are aged 60 plus may be able to access their fund using the ‘trivial commutation’ rules, where the total value of all of their pension pots are less than £30,000.

Also if the value of any pension pots is £10,000 or less, Ms Dreyfuss says they may be able to take that pension as cash, as it would be classed as a small pot. The number of pots that can be treated in this way is three, up from only two worth just £2,000 previously.

Currently, if an individual is over aged 55 and they do not have access to their pension benefits under the rules or terms and conditions of their plan, Ms Dreyfuss says they may be able to transfer their pension to a suitably approved pension arrangement.

She says: “Most personal pension policies allow individuals to retire from age 55. Individuals should take advice from a financial adviser regulated by the FCA, as to the suitability of such a transfer and any charges that may be involved.

“If an individual leaves an employer after less than two years of service, they may be able to receive their own pension contributions back as a refund. If individuals are struggling with debt they should take independent debt advice.

“Individuals can contact the Pensions Advisory Service (TPAS) for further guidance on pensions.”