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  • FIRST POST
    • ProDave
    • By ProDave 12th Jan 18, 9:17 AM
    • 518Posts
    • 583Thanks
    ProDave
    Transfering then drawing a pension at age 55
    • #1
    • 12th Jan 18, 9:17 AM
    Transfering then drawing a pension at age 55 12th Jan 18 at 9:17 AM
    I have a small personal pension from a previous employment currently valued at a few pounds under £30K It was originally taken out with Friends life under a scheme organised by that employer, and has now been absorbed into the Aviva group.

    I reach the magic age of 55 in March and I want to unlock, and start "drawing" this pension, mainly to release to me the 25% tax free lump sum. I do NOT want to buy an annuity with it, I want more flexibility.

    I have spoken to Aviva and they say drawdown is not an option with them, all they offered me was take the lot and pay the tax, or take an annuity. I asked them for an example and all they sent me was a statement of the funds value. I have decided they are a waste of space, can't carry out a simple instruction, and too inflexible.

    So I want to move it to somewhere with more options and easier to deal with. I have confirmed there are no exit fees if I transfer it to another provider.

    Hargreaves Lansdown is a company I see recommended often. Their Vantage SIPP seems to tick the boxes. I have been told the procedure is to transfer the fund to them, into the Vantage SIPP then when I reach 55 transfer it to a drawdown package thus releasing the 25% tax free lump.

    They tell me I do not have to take anything out of the drawdown immediately. Instead, I expect in a few years time when I retire (at 60) I will have a period where my income will be below the income tax threshold so if I draw it then most of it can be drawn tax free at that stage.

    Before I post the transfer forms to HL is there anything in my summary above that is wrong, or any reason not to use HL for this (if so who better do you recommend?)
    Last edited by ProDave; 12-01-2018 at 9:19 AM.
Page 2
    • NorthernGeezer
    • By NorthernGeezer 12th Jan 18, 8:20 PM
    • 38 Posts
    • 5 Thanks
    NorthernGeezer
    If you're a non-taxpayer or only withdraw a sum less than your allowance then you gain the full amount
    • ProDave
    • By ProDave 12th Jan 18, 10:14 PM
    • 518 Posts
    • 583 Thanks
    ProDave
    If you're a non-taxpayer or only withdraw a sum less than your allowance then you gain the full amount
    Originally posted by NorthernGeezer
    Do they srill deduct tax at source if that is the case and you have to claim it back via your tax return? or will they pay gross and it's up to you to declare it on your tax return?
    • Audaxer
    • By Audaxer 12th Jan 18, 10:49 PM
    • 779 Posts
    • 386 Thanks
    Audaxer
    Do they srill deduct tax at source if that is the case and you have to claim it back via your tax return? or will they pay gross and it's up to you to declare it on your tax return?
    Originally posted by ProDave
    I believe they do take the tax at source and if you are under the tax limit you can claim it back, but I think you can probably do that online as a one-off rather than having to start completing a tax return if you don't already need to complete one.

    I may be stating the obvious but do you realise that once your Aviva pension is transferred to HL, you will then have to decide where best to invest the £30k or the part thereof you do not intend to drawdown immediately. That is a whole new set of decisions as to what level of risk you want to take and what funds you want to invest in.
    • NorthernGeezer
    • By NorthernGeezer 12th Jan 18, 10:57 PM
    • 38 Posts
    • 5 Thanks
    NorthernGeezer
    I believe they do take the tax at source and if you are under the tax limit you can claim it back, but I think you can probably do that online as a one-off rather than having to start completing a tax return if you don't already need to complete one.
    I believe Audaxer is correct, tax is collected and you claim it back online.
    My understanding from other posts is that this is a 1 off until HMRC issue you with a tax code.
    • ProDave
    • By ProDave 13th Jan 18, 9:45 AM
    • 518 Posts
    • 583 Thanks
    ProDave
    I believe they do take the tax at source and if you are under the tax limit you can claim it back, but I think you can probably do that online as a one-off rather than having to start completing a tax return if you don't already need to complete one.
    I believe Audaxer is correct, tax is collected and you claim it back online.
    My understanding from other posts is that this is a 1 off until HMRC issue you with a tax code.
    Originally posted by NorthernGeezer
    I am self employed so I fill in a tax return every year.

    I do have another pension that I am drawing and have been since age 50. With that they issued a tax code and pay me gross. I then enter the amount I have received in the appropriate box on the tax return.
    • xylophone
    • By xylophone 13th Jan 18, 1:01 PM
    • 24,008 Posts
    • 14,016 Thanks
    xylophone
    My understanding from other posts is that this is a 1 off until HMRC issue you with a tax code.
    Even if they have a tax code and you make a one off withdrawal, tax is deducted and you either have to claim it back or await HMRC repayment after the end of the tax year.
    • NorthernGeezer
    • By NorthernGeezer 13th Jan 18, 3:09 PM
    • 38 Posts
    • 5 Thanks
    NorthernGeezer
    So is it best to make your withdrawal in March of the tax year or May?
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