Hi, I'm 55 at the end of March, I have small pension pot that I can cash in.
Apparently the first £10000 is not taxed but the balance is.
I've been told at 40%!
I've searched on line and various sites have said I can can claim some of the tax back.
Anyone done this?
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Again, armchair advice, but I think you can draw down the tax free part annually.
Cheers..
Jase
I read about that but need as much as I can to fund a small business.
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My understanding, you can take 25 % tax free, if you actually take the rest out then it will just be taxed as income so depends on what
tax band it would put you into if you took it in addition to you're other income.
I earn around £25000 a year with overtime
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Armchair advice, but my gut feel says don't draw down a pension for that purpose.
There are some guides on the Hargreaves Lansdown website but I can't link to them directly. Page 10 of the 'Options for Retirement' has some guidance on taking the entire pension out including tax calculators & how to deal with being put on an emergency tax code.
https://www.hl.co.uk/free-guides/you...-at-retirement
You really should get paid advice though as almost no-one would think pulling everything out of a pension was a good idea (other than a very small one perhaps).
Would it only be the amount over £20000 that would be taxed at 40% ?
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Current tax bands
With standard personal allowance first £11,500 Tax free
Then between £11,500 up to £45,000 - 20%
Above £45,000 - 40%
It would change a bit if you're total income was above £100,000 as you then start to lose some off your personal allowance and above £150,000 you pay 45%.
If taking it all puts you onto this kind of money I would definitely suggest taking advice, you could try the government pension advice service https://www.pensionwise.gov.uk/en you can get a free appointment subject to what type of pension you have.
Say you have £100k in the pot then you can take 25k tax free.
Assuming you have not recieved any other income in the Tax Year, you can also take your personal tax free allowance - about £11k.
The remaining 64k, will be taxed at the applicable rates.
If you want to avoid paying tax, then take the 25%, and then £11k per year until the money is all gone, but that of course assumes you have no other income.
Whoever does not know how to hit the nail on the head should be asked not to hit it at all.
Friedrich Nietzsche
Parents do something similar...
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Booked in to see a Financial Advisor this Friday to see if I will have enough to retire in 5 years when I hit 60. It will be interesting to see what she suggests as the best way to take the money out of the pot.
Its a pension. Its for when you retire. You'll need to take advice anyway, it's mandatory unless the pension pot is classed as trivial.
If you go in the .gov.uk web site it's all laid out for you.
£25 grand a year?, SC has been real good to you!!
And you can still get shafted.
https://www.google.co.uk/amp/s/amp.t...authority-tata
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Yes, the particular genius of the rules was that you were required to obtain expensive advice which you could then choose to ignore. Also some absolutely evil unscrupulous "advisers" getting a huge pay day at the expense of individuals struggling with job loss, etc..
Section 48 of the Pension Schemes Act 2015 requires that trustees or scheme managers check that advice has been taken before allowing a transfer to proceed, where the proposed transfer involves a DB pension or other safeguarded benefits worth more than £30,000. The advice must be provided by a firm with the FCA permission to advise on pension transfers. FCA rules apply to advice provided by FCA authorised firms and, in particular, we expect the firm to consider the assets in which their client’s funds will be invested as well as the specific receiving scheme.
It's just a matter of time...
I'm sorry, I'd assumed it was a decent DB scheme with a reasonable entitlement that the OP was asking about.
Totally agree, but op stated £10,000 fund value but not type of pension.
I've seen multipliers approaching 40 times accrued benefits, yet one last week of about 14. Certainly wouldn't advise transferring the latter, even with the scheme in defecit as they'd probably be better off in the PPF if their scheme folds, with 90% of the benefits.