pension lump sum update post 30

[Leggibone]

Did you know you can get 30 mins free advice about pensions? Have a look at pensionwise too,
You can take a tax free lump sum of 25% of the pot, the rest is taxible as Income (you can take this in many ways) I’d suggest using your free advice to find out what the particular implications of taking it in the various way are.

[disney332]

Anyone at age 55 can take all their pension benefits out in a single amount, 25% of which is tax free and 75% is added to income and taxed accordingly, subject to the lifetime pension allowance of £1,030,000 when tax increases...

Whether it is prudent to do so is open to question.

State benefits can be forefitted if you purposely deprive yourself of lifetime pension benefits to blow the lot quickly

Disney332

[sieborg]

In 2028 the law changes and the earliest you will be able to access a private pension will change from 55 to 58 years of age.

[mickey house]

Originally Posted by disney332

Anyone at age 55 can take all their pension benefits out in a single amount, 25% of which is tax free and 75% is added to income and taxed accordingly, subject to the lifetime pension allowance of £1,030,000 when tax increases...

Whether it is prudent to do so is open to question.

State benefits can be forefitted if you purposely deprive yourself of lifetime pension benefits to blow the lot quickly

Disney332

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Not all pensions schemes allow you to take the entire amount out, some only allow the maximum 25% lump sum to be taken out (which is tax free)

[thefergies]

Originally Posted by barryp1

Sorry but that is not true.

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You can take all your pot if you so wish even if over £30k but only 25% will be tax-free. Remainder will be taxed and it will be taxed at point of payment by your pension provider based on info they get from HMRC. That could mean paying more tax than you actually should based on your overall financial position but YOU then claim that back from HMRC.
And bear in mind that if you are Scottish, then tax amount will differ as we have slightly different rates than rest of UK. To give an example, someone earning £30k a year in England and planning to cash in a £100k pot will receive £72,770 so pays £27,230 in tax according to Pension Wise calculator.
Lots of aspects to consider and I respectfully suggest Pension Wise website will provide you with a better level of overall factual info than a Dibb General Chat Forum!

[disney332]

Originally Posted by mickey house

Not all pensions schemes allow you to take the entire amount out, some only allow the maximum 25% lump sum to be taken out (which is tax free)

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If you transfer ANY pension to a flexible Income Drawdown arrangement you can indeed take it ALL out in asingle lump.

Tax applies as per my other post.

Disney332

[disney332]

Originally Posted by thefergies

You can take all your pot if you so wish even if over £30k but only 25% will be tax-free. Remainder will be taxed and it will be taxed at point of payment by your pension provider based on info they get from HMRC. That could mean paying more tax than you actually should based on your overall financial position but YOU then claim that back from HMRC.
And bear in mind that if you are Scottish, then tax amount will differ as we have slightly different rates than rest of UK. To give an example, someone earning £30k a year in England and planning to cash in a £100k pot will receive £72,770 so pays £27,230 in tax according to Pension Wise calculator.
Lots of aspects to consider and I respectfully suggest Pension Wise website will provide you with a better level of overall factual info than a Dibb General Chat Forum!

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Tax is reclaimable...

Form P50 if in the same tax year as deduction

Disney332

[jane2211]

Also following as we are both hoping to take ours at 55 x

[Mexy02]

Originally Posted by disney332

If you transfer ANY pension to a flexible Income Drawdown arrangement you can indeed take it ALL out in asingle lump.

Tax applies as per my other post.

Disney332

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If anyone is considering this , Please take the proper advice if you are taking it out of a defined benefit scheme , we are now starting to get cases back for bad advice claims.

[amy56]

Originally Posted by sieborg

In 2028 the law changes and the earliest you will be able to access a private pension will change from 55 to 58 years of age.

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That’s typical as I turn 55 in 2029! ☹️