new rules for pension draw down

lynne20_2

I am currently a 40% tax payer, when I retire in 2 years time, I expect my income to drop substantially and I will only pay tax at 20%. Under the new rules I can withdraw all my pension pot but obviously most of that would be taxed at 40%. If I wait a year to withdraw the 75% of my pension pot that will be left, will this then be taxed at 20%?

Linton

As long as you keep your total income each year below the 40% limit you are OK. Withdrawal of cash is simply treated as additional income.

Note that these proposals are just out for consultation now before any vote in parliament. So no-one knows what the final changes will be.