Hi I've just found out about a pension pot I'd forgotten about it's worth about £55,000 the question is can I draw it out in a lump sum in September when I'm 65 any advice before I get on to pension people please
Under the current temporary rules, and the new proposed rules next year, you will be able to take 25% of the pot as a tax free lump sum, the balance would be subject to income tax if you draw on it, or you could buy an annuity the income from which would be subject to income tax.
Under the current temporary rules, and the new proposed rules next year, you will be able to take 25% of the pot as a tax free lump sum, the balance would be subject to income tax if you draw on it, or you could buy an annuity the income from which would be subject to income tax.
Thankyou would I be able to take it all and pay the tax in September or could I take £30,000 in September and the other £25,000 next April thanks
Thankyou would I be able to take it all and pay the tax in September or could I take £30,000 in September and the other £25,000 next April thanks
If you want to cash in you should take the tax free 25%, around £13,750, whenever you like, you may not have to wait until September when you are 65 unless the rules of the scheme say otherwise, when taking the balance you should consider whether it would push you into a higher tax bracket by taking it all in one financial year or spreading it.
If you want to cash in you should take the tax free 25%, around £13,750, whenever you like, you may not have to wait until September when you are 65 unless the rules of the scheme say otherwise, when taking the balance you should consider whether it would push you into a higher tax bracket by taking it all in one financial year or spreading it.
Hi I phoned pension people they said I can take 25% now but the rest must stay in pension but if I wait until next April I can draw it all in one go is this right thanks for any advice
Hi I phoned pension people they said I can take 25% now but the rest must stay in pension but if I wait until next April I can draw it all in one go is this right thanks for any advice
I'd heard the same thing on Radio 4's "Moneybox" programme a few weeks ago. That you will be able to draw the lot out if you wait until April 2015.
Hi I phoned pension people they said I can take 25% now but the rest must stay in pension but if I wait until next April I can draw it all in one go is this right thanks for any advice
There are new interim flexible drawdown rules in place until April that will allow you to take as much as you want provided you have other pension income of at least £12,000/ year, in April that income requirement will be removed.
If you do meet the income requirement taking all your pot (after the tax free 25%) this tax year will put you into the 40% tax bracket for some of it (assuming you aren't already) and it would be better to delay taking some of it until April.
Hi I've just found out about a pension pot I'd forgotten about it's worth about £55,000 the question is can I draw it out in a lump sum in September when I'm 65 any advice before I get on to pension people please
You can take 25% of it, around £13.5K as a tax free lump sum.
The remainder will buy you an annuity of around £2500 a year.
Hi I've just found out about a pension pot I'd forgotten about it's worth about £55,000 the question is can I draw it out in a lump sum in September when I'm 65 any advice before I get on to pension people please
I quite like the way you forgot about a £55k pension personally.
hi
I recently found out about a pension that I knew nothing about when I contacted the company the only information they could tell me was that it was for some form of redress but had no info on it so my question is the pot has only £1700 in it so under the new rules from next month can I cash it all or only take 25% as I don't see much point in reinvesting it I will be 60 in august
george
hi
I recently found out about a pension that I knew nothing about when I contacted the company the only information they could tell me was that it was for some form of redress but had no info on it so my question is the pot has only £1700 in it so under the new rules from next month can I cash it all or only take 25% as I don't see much point in reinvesting it I will be 60 in august
george
As far as I know...
At that level the trivial commutation/small pot rules would apply so you could take it all as cash come April 6th
You'll be liable to tax on 3/4 of it (that's where the 25%) comes in
The thing is. When you take it, what are you going to do with it. If all you intend to do is put it in a bank, you are probably better not taking it. The pension providers are likely to better at investing than you.
My Mum bought an £80k annuity and unexpectedly died 3 years later. Lost the lot.
Non-refundable. Non-protected etc etc
Rip-off Britain.
You yourself said she died unexpectedly. How is that 'rip-off Britain'? The annuity did what it was supposed to - gave her an income until she died. It's hardly the bank's fault that she died after only a few years.
Anyway it looks like the rules are going to be changed on that front. There are apparently plans to allow existing annuities to be sold. It's not clear though if that will only be for annuities bought before the latest pension changes or if it'll apply to all annuities.
If you have more than one pension is it possible to cash one in this year and delay the other until next year and draw that one out then thanks
Yep up to three pensions can be cashed in together or at separate times / years as long as the total value of them doesn't exceed £30,000
The tax would be a bit more complex that way, but likely beneficial to you. I think you'd be entitled to 25% of each tax free then the remaining 75% at whatever your income tax rate is for the year in question.
It's possible you'd be allowed to take 25% of the overall pot tax free from the first pension which if you are still working may make sense i.e.
1. take as much tax free as you can (whilst working)
2. retire
3. take the remainder and pay the tax (taking advantage of the fact that your income is lower so you have more income tax free allowance to play with)
I'd suggest seeking advice on this one once the "Pension Wise guidance service" is up and running as it will really depend on the details of your personal circumstances
Comments
Thankyou would I be able to take it all and pay the tax in September or could I take £30,000 in September and the other £25,000 next April thanks
Thankyou great help
I'd heard the same thing on Radio 4's "Moneybox" programme a few weeks ago. That you will be able to draw the lot out if you wait until April 2015.
If you do meet the income requirement taking all your pot (after the tax free 25%) this tax year will put you into the 40% tax bracket for some of it (assuming you aren't already) and it would be better to delay taking some of it until April.
You can take 25% of it, around £13.5K as a tax free lump sum.
The remainder will buy you an annuity of around £2500 a year.
I am not a financial adviser.
I quite like the way you forgot about a £55k pension personally.
It's easily done
It might well be, as I said, I am not a financial advisor.
I recently found out about a pension that I knew nothing about when I contacted the company the only information they could tell me was that it was for some form of redress but had no info on it so my question is the pot has only £1700 in it so under the new rules from next month can I cash it all or only take 25% as I don't see much point in reinvesting it I will be 60 in august
george
As far as I know...
At that level the trivial commutation/small pot rules would apply so you could take it all as cash come April 6th
You'll be liable to tax on 3/4 of it (that's where the 25%) comes in
The nice thing is, though, that it's your choice.
Non-refundable. Non-protected etc etc
Rip-off Britain.
Blimey. You must be loaded if you can forget about that.
Anyway it looks like the rules are going to be changed on that front. There are apparently plans to allow existing annuities to be sold. It's not clear though if that will only be for annuities bought before the latest pension changes or if it'll apply to all annuities.
And if she'd lived to 100 would you be saying the same thing?
Yep up to three pensions can be cashed in together or at separate times / years as long as the total value of them doesn't exceed £30,000
The tax would be a bit more complex that way, but likely beneficial to you. I think you'd be entitled to 25% of each tax free then the remaining 75% at whatever your income tax rate is for the year in question.
It's possible you'd be allowed to take 25% of the overall pot tax free from the first pension which if you are still working may make sense i.e.
1. take as much tax free as you can (whilst working)
2. retire
3. take the remainder and pay the tax (taking advantage of the fact that your income is lower so you have more income tax free allowance to play with)
I'd suggest seeking advice on this one once the "Pension Wise guidance service" is up and running as it will really depend on the details of your personal circumstances