Can someone confirm the rules about small pension pots?

kidmugsy

No. Why did you think it might be possible?

itm2

kidmugsy wrote: »

No. Why did you think it might be possible?

From reading this:
http://www.theguardian.com/money/2014/mar/27/changes-pensions-mean-to-you

(the section headed "You have several small pension pots")

kidmugsy

itm2 wrote: »

From reading this:
http://www.theguardian.com/money/2014/mar/27/changes-pensions-mean-to-you

(the section headed "You have several small pension pots")

Good grief! For other browsers here, the Guardian wrote
"You have several small pension pots

You will be able to take up to three personal pensions worth £10,000 each as cash, tax-free, ….
For example, if you had three personal pension pots of £7,000, £8,000 and £9,000 you will now be able to take these as a tax-free lump sum of £24,000."

Where on earth did they get the notion that they would be tax-free? I expect utter tripe in the Guardian, but usually only in the news and opinion pieces. The financial pages are usually better than that.

itm2

kidmugsy wrote: »

Good grief! For other browsers here, the Guardian wrote
"You have several small pension pots

You will be able to take up to three personal pensions worth £10,000 each as cash, tax-free, ….
For example, if you had three personal pension pots of £7,000, £8,000 and £9,000 you will now be able to take these as a tax-free lump sum of £24,000."

Where on earth did they get the notion that they would be tax-free? I expect utter tripe in the Guardian, but usually only in the news and opinion pieces. The financial pages are usually better than that.

Thanks for clarifying. So my original plan still sounds the most sensible - i.e. bring them all into the SIPP then take 25% of all of it tax-free in April 2015 before commencing drawdown....

fordcapri2000

It has probably already been said, but I cannot find it, are we now able to get our hand on all of our pension pots at the age of 55 and do as we please with it?

kidmugsy

fordcapri2000 wrote: »

It has probably already been said, but I cannot find it, are we now able to get our hand on all of our pension pots at the age of 55 and do as we please with it?

It's planned for 2015-16, subject to approval by parliament. So you'll have to keep up with the news.

xylophone

Can someone help me with this please? When I finish work soon my small work's pension will mean I won't be due to pay any tax. I have a stakeholder pension which I am still paying into. If I continue to contribute to it when I finish work can I still get the tax relief added to it......as I will then not be a tax payer?
Hope that's clear. Thank you.

You will then have no earned income or earned income under £3660? If so, the amount you can pay into a pension and get tax relief is restricted.
http://www.hmrc.gov.uk/pensionschemes/understanding.htm
`'Paying into your pension scheme
You can pay as much as you want into any number of company and personal pension schemes. Each year you can get tax relief on your pension contributions of up to 100 per cent of your UK earnings (salary and other earned income).

If you earn less than £3,600 you'll still get tax relief on contributions up to that amount as long as you're paying into a personal pension or any other scheme that uses the relief at source method for giving tax relief.
This is subject to an 'annual allowance' above which tax will be charged. The annual allowance for tax relief in the 2013-14 tax year is £50,000. If your pension savings for a tax year are more than the annual allowance you may have to pay a tax charge on the excess."

williama

Hi Don
Sorry if my post was confusing.
I took the 25% tax free allowance three years ago from my pension fund and then purchased an annuity for future drawdown. I have not been taking an income from the pot that was put in to the annuity
Hope this is clearer?
Williama

jem16

williama wrote: »

Hi Don
Sorry if my post was confusing.
I took the 25% tax free allowance three years ago from my pension fund and then purchased an annuity for future drawdown. I have not been taking an income from the pot that was put in to the annuity
Hope this is clearer?
Williama

No I'm afraid it's not clearer.

You either have an annuity, which is an annual income, OR you have put the pot into drawdown from which you can take zero income if you like.

You cannot purchase an annuity for future drawdown.

pzulba_2

Variation on the theme - article by Jason Groves in Daily Mail Sat 29 March suggests that even if one doesn't have a PP, one could open a fresh PP with £8K and the provider would then draw the £2k allowance giving a £10k fund and this could then be cashed in (& done twice more)

Is this correct? and what PP provider(s) would accept such methodology, & at what cost?

I am currently retired (age 66), drawing a Final salary pension since 2000 when I took VR and cycle max allowable through my company pension scheme (I had no AVC's)

Have I found a Golden (plated) Goose?

PZULBA - Out of Africa (Retired)