Where is my cash after accessing my defined contribution benefits pension?

A reader wants to know where their tax-free cash is after deciding to dip into a defined contribution benefits pension at the age of 55. We asked Sarah Coles of Hargreaves Lansdown to help out.

LoveMONEY reader Dave8250 had the following query on taking their defined contribution benefits pension at the age of 55: 

I turned 55 in mid-July. I made the decision to take my defined contribution benefits pension early at 55.

I completed all option forms over a month before my 55th birthday (provider insisted this must be done) and I’m still waiting for my tax-free cash.

My provider says they are waiting for my AVCs to disinvest. We have made many plans and this is now becoming a real issue.

We are about to purchase a shared ownership property and want to pay the deposit as soon as possible.

Am I being unreasonable? Does this sound normal? I just assumed I would receive my money on my birthday.

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Help from the loveMONEY Expert Panel 

We asked Sarah Coles (pictured), personal finance analyst at investment firm Hargreaves Lansdown and member of the loveMONEY Expert Panel, to help our reader. 

Here's what she said:

This must be incredibly frustrating, and it will come as no comfort at all to know this isn’t terribly uncommon.

Not all pension companies are the same, so while modern pension companies are geared to individual needs and are more responsive to requests like this, some trust-based schemes can be slower.

That doesn’t mean they’re bad pensions in themselves, it’s just that they’re not as quick in situations like this.

You might have to wait up to a month for your money, but as you’ve been waiting longer than this, it’s worth calling them.

Make sure they have all the forms and documents they need in order to release the cash.

You can also ask them when you can expect the money, and make a note to call back if it doesn’t arrive.

If you don’t get a decent response, you can make a complaint. Each provider has a specific complaint process, so check to make sure you’re following the rules.

If you want help with your complaint, or if your pension company fails to respond to this too, you can contact The Pensions Advisory Service on 0800 011 3797.

I hesitate to say it, because it’s no help at all to you, but if anyone else is approaching 55 and plans to take their tax-free cash, hopefully your experience will help them appreciate this risk. 

It’s worth waiting until the cash is in the bank before taking on any specific spending commitments - in case this sort of thing happens.

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The views expressed by the author do not necessarily reflect those of loveMONEY. This article does not constitute financial advice. You should speak to a professional financial adviser before engaging in any transaction.