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  • FIRST POST
    • MISheard
    • By MISheard 13th Jun 17, 12:48 PM
    • 2Posts
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    MISheard
    Contributing to one pension whilst receiving income from another
    • #1
    • 13th Jun 17, 12:48 PM
    Contributing to one pension whilst receiving income from another 13th Jun 17 at 12:48 PM
    Hi Everyone - I hope someone can help advise?

    I recently reached state retirement age and am taking my stste pension plus income from two other 'Final salary' schemes. I am also continuing to work part-time and am still contributing to my work place pension. I have not taken any tax-free lump sums. I am considering increasing my pension contribution to my work place pension (approximately doubling my contribution). Am I right in thinking this will not count as recycling and will not result in any tax penalty? Also if I retire fully in say two or three years and wish to take a tax-free lump sum from the work place pension will this result in any tax penalty?
Page 1
    • kidmugsy
    • By kidmugsy 13th Jun 17, 2:23 PM
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    kidmugsy
    • #2
    • 13th Jun 17, 2:23 PM
    • #2
    • 13th Jun 17, 2:23 PM
    As I understand it the recycling rules are about recycling tax-free lump sums. If you haven't taken one yet, you appear to be in the clear, but only "appear". A future TFLS can be viewed as part of the recycling of money contributed to pensions before that later TFLS is taken. The relevant period is five tax years, namely the year of taking the TFLS, the two years before, and the two years after.

    There are however, exemptions given depending on the sizes of the annual contributions and the size of the TFLS.

    http://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/recycling-of-tax-free-cash/
    • MISheard
    • By MISheard 15th Jun 17, 2:43 PM
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    MISheard
    • #3
    • 15th Jun 17, 2:43 PM
    • #3
    • 15th Jun 17, 2:43 PM
    Thnak you, kidmugsy, the flow chart was very useful.
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