Pension Raiding - Some Simple Questions

[henrycrun]

Supposing I have a pension pot of £80K.

If I ask to take £20k out as cash, (not wise but never mind) do I get £5000 tax free and pay income tax on £15,000 ?

[PurpleMoonlight]

Assuming you are age 55 or over, yes you can do it that way if you wish. It will have the effect of reducing your future contribution annual allowance to £10,000 though.

Alternatively, you can crystallise the whole £80,000 and receive £20,000 (25%) as a tax free pension commencement lump sum. Providing you do not draw any pension your annual allowance will remain at £40,000.

Note the Law permits this, not necessarily your pension arrangement. You will need to check with them.

[Ginge R]

Henry,

Can you straddle the amount over two tax years, to help?

[LeoSayer]

If you have no other earnings then you can utilise your tax free allowance on much of the remaining £15k.