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Don&#39t cash in pension too early, warns FSA

The FSA is warning consumers of the pitfalls of accessing their pension pot before they retire.

It says people should consider cashing in other investments before accessing the tax-free cash in their pension.

The regulator says its initiative is aiming to counter recent TV, press and mail campaigns that have targeted over-50s who have occupational or personal pension plans.

Director of investment firms David Kenmir says: “Releasing cash may sound very tempting but people need to stop and think about whether they really need to do it.

“It is rarely in anyone&#39s long-term financial interests. Only in exceptional cases, where an individual has immediate needs and no other option, should anyone even consider doing it.

“It is an expensive way to free up extra cash and, in addition, the financial adviser may well take a fee for dealing with it. meaning that part of the individual&#39s hard-earned pension pot will benefit him rather than the individual.”

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