Ben Rees, a pensions expert from Denehall Wealth Management Ltd, answers the question:-
I have a pension which is only worth about £5000 approx as I only paid onto it for a short period before being made redundant, however when I have asked Aviva to release funds to me they say they cannot, please can you help me cash all of this money as I have been in financial hardship since being made redundant 4 years ago and that money would ease the pressure, I also have a young son. I am 27 years old.
I am genuinely sorry to hear about your position but unfortunately the options in your circumstances are very limited. Under current legislation, the majority of pension holders cannot access their pensions before age 55, which is why Aviva is saying it cannot release the funds.
An exception to this is where serious ill-health is suffered by the member, or certification received from a doctor that confirms you have less than 12 months to live. Even in these cases, early access to your pension is subject to the specific rules of the scheme that you are a member of.
Another exception involves a rule known as 'Triviality', which allows investors with small pension pots to take the entire amount as a lump sum, subject to various rules and conditions — but once again the rules around Triviality are quite strict, and your age would preclude you from this option (you have to be at least 60 years old and have total pension assets built up of less than £18,000 (for the 2012/13 tax year).
Given your age and circumstances, accessing your pension at this stage is not a viable course of action. I recommend speaking to an adviser at your local Citizens Advice Bureau, who can advise on the various supports available to people suffering from financial hardship.
If you have a question for Ben go to the Myfinances.co.uk's Ask the Pensions Expert section
Or for more information on your pension options go to Denehall Wealth Management's site
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