If you want to fully close your pension plan early, yes – you will have to pay any account fees which would have been paid anyway if you had kept your pension plan going until the end of the selected duration. This means that closing it near the start of the plan is completely pointless, because even though the account fees are small, if you haven’t yet paid in very much, you’re going to receive somewhere between close-to-nothing and precisely nothing – so if you’re not committed to providing a retirement income for Future You, don’t start a pension plan!


It also means that if you want to close and withdraw your pension plan near the end of your selected duration, the remaining account fees are very small and therefore will not have any significant impact on your overall pension value. This is really useful if you are near the end of your selected duration, have a pension value which has already reached your target, and you want to crack on and retire early – you can, and you won’t have to pay big penalties to do it.


If you want to make a partial withdrawal but not fully close the account, you can do it for free, without any penalty fees, as long as you have completed the initial period and maintain a full surrender value of $2,400. There is one pretty big cost of doing this though – if you make a withdrawal from your pension plan before the end of your chosen duration, you negate (lose) the minimum guaranteed future value. Again, doing this early on is not an intelligent thing to do, because even though you won’t get charged any penalty fees, that guaranteed minimum value is highly valuable, so you don’t want to lose it. And again, if you are near the end of the duration and have a pension value significantly higher than the minimum guaranteed value and are therefore unlikely to be needing that safety net, you can make a penalty-free withdrawal without any significant disadvantages.