Pension Raiding - Some Simple Questions
Pension Raiding - Some Simple Questions
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henrycrun

Original Poster:

2,473 posts

270 months

Wednesday 24th February 2016
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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

22,362 posts

187 months

Wednesday 24th February 2016
quotequote all
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

4,761 posts

249 months

Wednesday 24th February 2016
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Henry,

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

LeoSayer

7,838 posts

274 months

Thursday 25th February 2016
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If you have no other earnings then you can utilise your tax free allowance on much of the remaining £15k.