Can We Take a Lump Sum

tesuhoha

somethingcorporate wrote: »

IIRC triviality is total pensions worth £18k, so that is going to be the magic number you should NOT go over if you want to excercise the ability to take the lot at once.

Thank you. I think that is what we are going to do. We would be fools not to.

We don't quite understand the £720 a year that the Government will add to it - what is that for?

jem16

tesuhoha wrote: »

We don't quite understand the £720 a year that the Government will add to it - what is that for?

Basic rate tax relief of 20% of the £3600 gross payment.

tesuhoha

Thank you. We get it now.

sandraroffey

my pension was with prudential and when i retired at 60, my pension was worth the grand sum of £32 per month. so i talked to them about the triviality rules and can i have it all at once, and they flatly refused. i spoke to lots of other people including the financial ombudsman, and they all said the same thing: its not a right, its whether or not its company policy to invoke the triviality rules. and prudential didnt.

tesuhoha

sandraroffey wrote: »

my pension was with prudential and when i retired at 60, my pension was worth the grand sum of £32 per month. so i talked to them about the triviality rules and can i have it all at once, and they flatly refused. i spoke to lots of other people including the financial ombudsman, and they all said the same thing: its not a right, its whether or not its company policy to invoke the triviality rules. and prudential didnt.

Wow! Sorry to hear that and thanks for this. We will look further into it.

tesuhoha

sandraroffey wrote: »

my pension was with prudential and when i retired at 60, my pension was worth the grand sum of £32 per month. so i talked to them about the triviality rules and can i have it all at once, and they flatly refused. i spoke to lots of other people including the financial ombudsman, and they all said the same thing: its not a right, its whether or not its company policy to invoke the triviality rules. and prudential didnt.

Did your pension fund amount to over £18,000 though?

jem16

sandraroffey wrote: »

my pension was with prudential and when i retired at 60, my pension was worth the grand sum of £32 per month.

Was this your only pension?

dunstonh

Prudential offer triviality on their pension schemes. Even if they didnt it wouldnt have stopped you as you just transfer it to a stakeholder pension and then take it under triviality.

However, Prudential (like the others) get you to state the amount of lifetime allowance you have used up. So, if they refuse under triviality its either as its over 1% of the lifetime allowance or it was not your only pension (and the total is over 1%).

kidmugsy

Be careful. If you want everything out tax-free, you want each pension fund to be about £6000 - see my calculation higher up the thread. If you get more than that, the excess bit will have 25% tax-free and the other 75% taxed. Happily, having two funds of about £6k each guarantees that the total is below the £18000 cut-off for triviality. And there's no point in having more than two funds if you want to use "triviality" because you want to cash them in in two different tax years but also within twelve months of each other.

dunstonh

All trivial payments are taxed as if month one earnings. So they will be taxed initially and you have to claim it back.