Quick pension question
Quick pension question
Author
Discussion

audi321

Original Poster:

6,149 posts

242 months

Saturday 13th July 2024
quotequote all
I'm out of date with things these days, but if I have 2 pensions, one from an old job (dormant) and one with my current employer (actively paying into), what would happen with regards to future contributions to my current employer one if I took the tax free cash (25%) from my old dormant one?

Obviously assuming I was over age 55 and wanted to keep working and paying in as I and my employer currently do.

Does the £10k money purchase annual allowance only relate to the pension you start taking the benefit from, or both pensions? If it affects both. how would my existing pension scheme know to apply the MPAA rules?

Thanks all.

Edited by audi321 on Saturday 13th July 12:19

Mr Pointy

13,325 posts

188 months

Saturday 13th July 2024
quotequote all
The MPAA applies to you, so limits contributions to any pensions.

audi321

Original Poster:

6,149 posts

242 months

Saturday 13th July 2024
quotequote all
Mr Pointy said:
The MPAA applies to you, so limits contributions to any pensions.
Thanks, I thought that might be the case, but from what I read, it's only if you start taking 'taxable income' from the pension, I'm only wanting the TFC, would that still apply?


DoubleSix

12,535 posts

205 months

Saturday 13th July 2024
quotequote all
Correct. MPAA not triggered if just taking PCLS.

OddCat

2,828 posts

200 months

Saturday 13th July 2024
quotequote all
Mr Pointy said:
The MPAA applies to you, so limits contributions to any pensions.
So sure and yet so wrong laugh

anonymous-user

83 months

Saturday 13th July 2024
quotequote all
Mr Pointy said:
The MPAA applies to you, so limits contributions to any pensions.
Don't give up the day job.

Car bon

5,221 posts

93 months

Saturday 13th July 2024
quotequote all
You can take the 25% tax free without affecting anything else. Take even 1p of the other 75% and MPAA drops drastically though.
I'm fairly sure you could also take the 25% from the one you're currently paying into and also wouldn't affect anything .WRT future contributions

If you're in any doubt, then just ask the pension provider before taking the money.

39sl

200 posts

153 months

Saturday 13th July 2024
quotequote all
100% correct.
You can take the 25% tax-free cash lump sum and put your pension pot into flexi-access drawdown, and if you don’t take any income from it the MPAA does not apply.
If the pension value is less than £10K then the MPAA doesn’t come into it.