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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
    • 22,370 Posts
    • 12,909 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
    • 9,457 Posts
    • 6,234 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
    • 4,453 Posts
    • 26,860 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!
    I sold my only sock
    For a handshake and twenty menthol cigarettes
    • atush
    • By atush 12th Mar 17, 11:47 AM
    • 16,156 Posts
    • 9,851 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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