Discussion
Many moons ago I took out a SIPP (Self-invested personal pensions) without really knowing what I was doing. After I while I decided not to invest anymore into it. Low and behold on reaching my 65th I now have a £25000 pension pot.
The company won’t let me take out the 25% tax free. They will let me move the pot to another company free of charge. What I want to do is take out the 25% and leave the rest to do what it does. I have looked at PensionBee which seems to be a good option. Any thoughts?
The company won’t let me take out the 25% tax free. They will let me move the pot to another company free of charge. What I want to do is take out the 25% and leave the rest to do what it does. I have looked at PensionBee which seems to be a good option. Any thoughts?
Lawrence-gzed9 said:
It was the prudential. Not a scooby about minimum retained fund post crystallisation. If it was there I didn’t read it.
It is shocking how the so called SIPPs from some insurance companies do not give basic SIPP functionality.It looks like your will have to transfer it to access the tax free cash. Their are multiple providers that will do this for you (Hargreaves Lansdown is popular here).
You will likely be able to access the same fund(s) you are currently in or could switch to a lower cost Vanguard (or other) option.
Prudential will not let me take out the 25% tax free. I can close the account and have to pay tax . They will let me move to another company free of charge. I am basically looking for a company who will give me the 25% tax free and invest the rest. I have been told that the government,in all its wisdom,may abolish the 25% tax free in the near future. Thanks for the help guys.
Lawrence-gzed9 said:
Prudential will not let me take out the 25% tax free. I can close the account and have to pay tax . They will let me move to another company free of charge. I am basically looking for a company who will give me the 25% tax free and invest the rest. I have been told that the government,in all its wisdom,may abolish the 25% tax free in the near future. Thanks for the help guys.
Sorry, I don't believe that Prudential prohibit the PCLS. I fear you have misunderstood them.Whoever told you that the Government may abolish it is talking out of their arse.
PurpleMoonlight said:
Sorry, I don't believe that Prudential prohibit the PCLS. I fear you have misunderstood them.
I've just has a look and it and they have made it very complex. One take is that you have to start taking an income at the point of wanting the tax free cash (which is not whet the OP wants) but a way round this is to move your 'Pension Saving Account' into a 'Pension Income Account' which does allow the OP to do what they are seeking.OP - What is the name of your pension scheme? They have many with different rules.
The name of the scheme is “ defined contribution (money purchase)”. I don’t really have a problem leaving it were it is but is this the best option. The only thing concerning me was if I needed the 25% tax free in a hurry I would have to wait on it being moved to another provider. Would it be easier to move it from where it is to a pension income account.
Lawrence-gzed9 said:
I have just retired and am to collect my state pension end of this month. This is my only pension. When I was younger I took out a sipp and after a few years decided to stop it. This is why it was such a bonus, I had forgotten all about it.
Okay.I suggest you wait until next tax year.
Then take the lot as an Uncrystallised Fund Pension Lump Sum (UFPLS).
25% of that would be tax free, and the balance taxed under PAYE. An emergency tax code is used but you can reclaim any overpayment.
Depending on your actual state pension you could probably save some tax if you transfer to another SIPP and drew down over a few years.
Choice is yours.
PurpleMoonlight said:
Okay.
I suggest you wait until next tax year.
Then take the lot as an Uncrystallised Fund Pension Lump Sum (UFPLS).
25% of that would be tax free, and the balance taxed under PAYE. An emergency tax code is used but you can reclaim any overpayment.
Depending on your actual state pension you could probably save some tax if you transfer to another SIPP and drew down over a few years.
Choice is yours.
With great respect, why???I suggest you wait until next tax year.
Then take the lot as an Uncrystallised Fund Pension Lump Sum (UFPLS).
25% of that would be tax free, and the balance taxed under PAYE. An emergency tax code is used but you can reclaim any overpayment.
Depending on your actual state pension you could probably save some tax if you transfer to another SIPP and drew down over a few years.
Choice is yours.
The OP can take 25% tax free now, plus anything else below the higher rate threshold. Over two tax years this doubles, so waiting makes no sense to me (unless the OP is higher or highest rate now).
You do know your stuff though, so perhaps I have missed something...
I'm also wondering why he'd want to take a tax hit on the 75% when it could be taken more steadily each year to utilise his income tax allowance with an eye on his state pension.
(just googled state pension to see how much it is pa; it's all given as pw - what the heck use is that and my calculator is out of reach!!)
(just googled state pension to see how much it is pa; it's all given as pw - what the heck use is that and my calculator is out of reach!!)
The reason I suggested next tax year is because he has earned income plus state pension this tax year, and cashing in the pension may have tipped him into 40% tax. If it doesn't then it could be drawn this tax year.
I did state he might pay less tax by transferring elsewhere and drawing over a few years.
I did state he might pay less tax by transferring elsewhere and drawing over a few years.
PurpleMoonlight said:
The reason I suggested next tax year is because he has earned income plus state pension this tax year, and cashing in the pension may have tipped him into 40% tax. If it doesn't then it could be drawn this tax year.
I did state he might pay less tax by transferring elsewhere and drawing over a few years.
Makes sense now.I did state he might pay less tax by transferring elsewhere and drawing over a few years.
OP - Switch it to another SIPP provider, take your tax free cash and draw the rest out over two tax years to minimise tax and place into a Stock & Shares ISA to continue to grow tax free (just as you SIPP does) with the added benefit of tax free income.
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