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  • FIRST POST
    • saraybach54
    • By saraybach54 11th Mar 17, 10:17 PM
    • 1Posts
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    saraybach54
    Drawing Work Pension in Two Lumps?
    • #1
    • 11th Mar 17, 10:17 PM
    Drawing Work Pension in Two Lumps? 11th Mar 17 at 10:17 PM
    My husband earns £33k pa and has £47k in his work pension...
    He wants to take the whole lot out in one go...
    I wondered if it would be better to take it out in two lumps instead?
    The first half now (before April 6th - 16/17) and the second half in June (17/18)?
    The Guide Booklet seems to say that it's okay to do this... but as with everything pertaining to drawing lump sums in pensions... it's not very specific...
    I calculated we'd save approx £8k doing it this way...
Page 1
    • xylophone
    • By xylophone 11th Mar 17, 11:09 PM
    • 22,001 Posts
    • 12,691 Thanks
    xylophone
    • #2
    • 11th Mar 17, 11:09 PM
    • #2
    • 11th Mar 17, 11:09 PM
    Your husband is currently employed by a certain company and has an occupational pension with this company?

    Has he reached scheme pension age?
    • kidmugsy
    • By kidmugsy 12th Mar 17, 12:22 AM
    • 9,368 Posts
    • 6,143 Thanks
    kidmugsy
    • #3
    • 12th Mar 17, 12:22 AM
    • #3
    • 12th Mar 17, 12:22 AM
    My husband earns £33k pa and has £47k in his work pension...
    He wants to take the whole lot out in one go...
    .
    Originally posted by saraybach54
    Assuming he's old enough to do it, and has some good reason to do it: for simplicity of arithmetic treat the £47k as £48k:

    (i) Take the tax-free lump sum of about £12k, leaving about £36k.

    Withdraw £10k of income. Then if your husband has no other income, income for 16/17 = £(33 + 10)k = £43k, so just avoids 40% tax. In 17/18 withdraw £12k, because the higher rate threshold will have moved up to £45k. Carry on until he's emptied it. It's daft to pay 40% tax when he needn't.

    Mind you, he might avoid some 20% tax too if he put off emptying it until he's stopped work.
    • Blackbeard of Perranporth
    • By Blackbeard of Perranporth 12th Mar 17, 5:25 AM
    • 4,378 Posts
    • 26,456 Thanks
    Blackbeard of Perranporth
    • #4
    • 12th Mar 17, 5:25 AM
    • #4
    • 12th Mar 17, 5:25 AM
    My husband earns £33k pa and has £47k in his work pension...
    He wants to take the whole lot out in one go...
    I wondered if it would be better to take it out in two lumps instead?
    The first half now (before April 6th - 16/17) and the second half in June (17/18)?
    The Guide Booklet seems to say that it's okay to do this... but as with everything pertaining to drawing lump sums in pensions... it's not very specific...
    I calculated we'd save approx £8k doing it this way...
    Originally posted by saraybach54
    Your husband is still working.
    Your husband is still paying into this pot.

    Fool















    Money!
    Your thoughts fade
    As you shake between the fags
    • atush
    • By atush 12th Mar 17, 11:47 AM
    • 16,095 Posts
    • 9,802 Thanks
    atush
    • #5
    • 12th Mar 17, 11:47 AM
    • #5
    • 12th Mar 17, 11:47 AM
    Why does he want to take the money now? what will her retire on if he does?

    Dont take it in lump sums that would put him into HRT- it is a foolish way to waste your pension by paying too much tax on it.
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