Cashing in small pension. Tax question.

[Wacky Racer]

Ok, I'll try and keep this as simple as possible

My sister (aged 57) has a pension with a pot that has accrued to £12,000 give or take.

She retired from her part time job with the NHS in September 2018 earning around 3k since April 6th and did not pay any income tax on this as the tax free allowance is a tad under 12k.

She plans to "cash in" this pension as soon as possible after 6th April 2019, so bearing in mind she has definitely finished paid employment for good, by my reckoning the 12k should be paid out 100% tax free, because she has a 25% tax free pension withdrawal allowance (3k)..therefore her "income" for the tax year 2019/20 would be £9k, well under the 12k threshold.

Can anyone confirm my thoughts?

Cheers.

[Ginge R]

Based on what you’ve said, it would appear so. I’m not taking on clients, so if you want to message me, we can exchange numbers and chat it through tomorrow if you like, without fear I’ll try and flog you anything.

[Vanordinaire]

I did this recently.
It worked out as you've said in the long term, but the pension company initially took tax off my payment at 'emergency' rate.
I had the choice of waiting for the end of the tax year and getting an automatic rebate from the tax man, or claiming the tax back immediately based on 'estimates' of my income for the full year. I did the latter, and got pretty much what I expected about 2 weeks after my claim. I might still get another small rebate (or bill) at the end of the tax year.

[Wacky Racer]

Many thanks to both of you for the prompt replies. I guess she would be best either asking the bods at the pension company direct who handle this stuff or at her local tax office.

She would not mind paying some "emergency tax" providing it would be refunded by HMRC within a short period of time, as she definitely won't be returning to work.