Pension withdrawl help
Discussion
Hi all,
Wife has just turned 55, and she has a small pension pot she would like to withdraw in full.
She understands the tax position.
Now, it was just under £30,000 when she requested the withdrawl, but they have just written to say that the value with July's factors is just over that amount, and she cannot withdraw it all as a lump sum. They have given her option that are no lump sum and a tiny yearly pension, a bit of a lump sum and smaller yearly pension, or transfer to another pension scheme.
I thought that you could take your pension nowadays as a lump sum, subject to taxes etc, so why cant she do this?
Wife has just turned 55, and she has a small pension pot she would like to withdraw in full.
She understands the tax position.
Now, it was just under £30,000 when she requested the withdrawl, but they have just written to say that the value with July's factors is just over that amount, and she cannot withdraw it all as a lump sum. They have given her option that are no lump sum and a tiny yearly pension, a bit of a lump sum and smaller yearly pension, or transfer to another pension scheme.
I thought that you could take your pension nowadays as a lump sum, subject to taxes etc, so why cant she do this?
There seems to be a world of difference between defined benefit and defined contribution pensions.
I cashed three of the former early and took the maximum cash I could get while I was still around to spend it!
With those you only get taxed once on the bit over £30K instead of possibly getting taxed every year if you take the future income options.
But they are all different so it's definitely worth seeking some informed advice.
I cashed three of the former early and took the maximum cash I could get while I was still around to spend it!
With those you only get taxed once on the bit over £30K instead of possibly getting taxed every year if you take the future income options.
But they are all different so it's definitely worth seeking some informed advice.
Bugger.
Another tax trap to watch. I have a small private pension currently worth circa £8k. Was planning to dump 5 or 6k a year between now and retirement to avoid higher tax. Retiring age 63 or 64 in 4 or 5 years time.
If I took £30 in one lump it would put me in higher tax due to another pension
Sorry for slight thread diversion.
Can I have two £15k pension pots and cash them in full in consecutive tax years to avoid higher rate tax?
Another tax trap to watch. I have a small private pension currently worth circa £8k. Was planning to dump 5 or 6k a year between now and retirement to avoid higher tax. Retiring age 63 or 64 in 4 or 5 years time.
If I took £30 in one lump it would put me in higher tax due to another pension
Sorry for slight thread diversion.
Can I have two £15k pension pots and cash them in full in consecutive tax years to avoid higher rate tax?
Pensions are complex, it's always worthwhile seeking regulated financial advice if uncertain as to best way forward when it comes to taking money out.
Failing, the Money Advice Service is quite helpful.
https://www.moneyadviceservice.org.uk/en
Failing, the Money Advice Service is quite helpful.
https://www.moneyadviceservice.org.uk/en
Helicopter123 said:
Pensions are complex, it's always worthwhile seeking regulated financial advice if uncertain as to best way forward when it comes to taking money out.
Failing, the Money Advice Service is quite helpful.
https://www.moneyadviceservice.org.uk
/en
Useful link thanks.Failing, the Money Advice Service is quite helpful.
https://www.moneyadviceservice.org.uk
/en
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