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  • FIRST POST
    • cooky44
    • By cooky44 11th Jul 17, 8:51 AM
    • 42Posts
    • 8Thanks
    cooky44
    Cash in Pension @ 55
    • #1
    • 11th Jul 17, 8:51 AM
    Cash in Pension @ 55 11th Jul 17 at 8:51 AM
    Hi
    I have 2 private pensions - each only with a couple of thousand in - I am approaching my 55th birthday and wondered:
    1) Can I cash the 2 of them in - will only have about £4000 in total from 2 pensions
    2) As I am still in full time employment - do I have to contact the Inland revenue with regard to the money I recieve and will it be added to my yearly salary for deductions ?

    Thanks
Page 1
    • Spreadsheetman
    • By Spreadsheetman 11th Jul 17, 9:16 AM
    • 36 Posts
    • 27 Thanks
    Spreadsheetman
    • #2
    • 11th Jul 17, 9:16 AM
    • #2
    • 11th Jul 17, 9:16 AM
    Yes - google "trivial commutation" and all those questions are answered.

    Note that doing this affects the amounts you can contribute to pensions going forward.
    • xylophone
    • By xylophone 11th Jul 17, 12:26 PM
    • 22,050 Posts
    • 12,719 Thanks
    xylophone
    • #3
    • 11th Jul 17, 12:26 PM
    • #3
    • 11th Jul 17, 12:26 PM
    Re small pot and MPAA

    http://www.scottishwidows.co.uk/extranet/literature/doc/FP0473

    http://www.pruadviser.co.uk/content/knowledge/technical-centre/money_purchase_annual_allowance_mpaa/
    • atush
    • By atush 11th Jul 17, 12:27 PM
    • 16,104 Posts
    • 9,813 Thanks
    atush
    • #4
    • 11th Jul 17, 12:27 PM
    • #4
    • 11th Jul 17, 12:27 PM
    Are these the only pensions you have?

    Will you like the idea of paying 20-40% tax on 3K of it?

    Will it push your income into HRT?

    Just because you CAN do something, doesnt mean you should.
  • jamesd
    • #5
    • 11th Jul 17, 12:58 PM
    • #5
    • 11th Jul 17, 12:58 PM
    You could combine them then use the small pot rule once. Since you are limited to doing it only three times in your life for this type it would be a bad move to use it twice when once will do the job.

    Since the small pot rule allows up to ten thousand Pounds it would be a good move to pay in more to get closer to that. Then you get a quarter of the extra tax relief out tax free, a nice quick money maker.

    I've assumed that you won't päy a higher rate of tax on the taxable portion than the relief you receive on the way in.
    Last edited by jamesd; 11-07-2017 at 1:00 PM.
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