Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Glengowrie
    • By Glengowrie 21st Mar 14, 12:07 PM
    • 11Posts
    • 1Thanks
    Glengowrie
    New Tax Year - any benefit in waiting
    • #1
    • 21st Mar 14, 12:07 PM
    New Tax Year - any benefit in waiting 21st Mar 14 at 12:07 PM
    I have a small stakeholder pension with Legal & General (about £7500). I am no longer working and am a non taxpayer. Under the new rules announced in the Budget I think I can cash this small pension in full and with no tax liability. My last annual benefit statement dated May 2013 showed the plan value at 5 April 2013, so I assume I will get another statement soon showing value to 5 April 2014. Is there any benefit or disadvantage in waiting till the next statement before applying to cash in the pension?
Page 1
    • Linton
    • By Linton 21st Mar 14, 12:56 PM
    • 6,940 Posts
    • 6,535 Thanks
    Linton
    • #2
    • 21st Mar 14, 12:56 PM
    • #2
    • 21st Mar 14, 12:56 PM
    You cant cash it in until the new rules start in 27th March. Then there is the question of how long it will take the pension providers to have their processes in place. So you are most unlikely to be able to cash it in before the 5th April anyway. If you are in no hurry I would suggest waiting until things have settled down a bit.

    You will only have no tax liability if your total income including the cash withdrawal (-25% for the tax free lump sum) is less than the tax allowance, £10000 after 5th April.
    • Glengowrie
    • By Glengowrie 21st Mar 14, 1:49 PM
    • 11 Posts
    • 1 Thanks
    Glengowrie
    • #3
    • 21st Mar 14, 1:49 PM
    • #3
    • 21st Mar 14, 1:49 PM
    Thanks for that very helpful advice. That's really good news for me.
    • ScottyLP
    • By ScottyLP 21st Mar 14, 7:42 PM
    • 84 Posts
    • 432 Thanks
    ScottyLP
    • #4
    • 21st Mar 14, 7:42 PM
    • #4
    • 21st Mar 14, 7:42 PM
    Also, you have to be over the age of 60. If not, you'd have to wait a year before you can access the whole fund.
    • Glengowrie
    • By Glengowrie 21st Mar 14, 8:48 PM
    • 11 Posts
    • 1 Thanks
    Glengowrie
    • #5
    • 21st Mar 14, 8:48 PM
    • #5
    • 21st Mar 14, 8:48 PM
    I thought the Budget changed that age restriction and lowered it to 55.
    • atush
    • By atush 21st Mar 14, 9:03 PM
    • 15,288 Posts
    • 9,163 Thanks
    atush
    • #6
    • 21st Mar 14, 9:03 PM
    • #6
    • 21st Mar 14, 9:03 PM
    It changes next april. s far as I know, it remains 60 til then.
    • TBC15
    • By TBC15 22nd Mar 14, 3:53 AM
    • 76 Posts
    • 16 Thanks
    TBC15
    • #7
    • 22nd Mar 14, 3:53 AM
    • #7
    • 22nd Mar 14, 3:53 AM

    You will only have no tax liability if your total income including the cash withdrawal (-25% for the tax free lump sum) is less than the tax allowance, £10000 after 5th April.
    Originally posted by Linton


    Is the 25% taken into consideration with respect to tax allowance?
    • Linton
    • By Linton 22nd Mar 14, 8:59 AM
    • 6,940 Posts
    • 6,535 Thanks
    Linton
    • #8
    • 22nd Mar 14, 8:59 AM
    • #8
    • 22nd Mar 14, 8:59 AM
    Is the 25% taken into consideration with respect to tax allowance?
    Originally posted by TBC15

    The 25% is completely outside the tax system and does not affect your tax liabilities in any way.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

279Posts Today

2,542Users online

Martin's Twitter