Pensions reform

Melmar

Hi


If I have two company pensions one with company A and the other with company B.


When I reach retirement age will I be allowed under the pensions reform to keep company A's pension and cash in company B's pension for a lump some, or do I have to cash in both?


many thanks

dunstonh

When I reach retirement age will I be allowed under the pensions reform to keep company A's pension and cash in company B's pension for a lump some, or do I have to cash in both?

You are not cashing a pension in under the new rules. So, the position is the same as it is now. you can do one thing with pension A and keep pension B or vice versa.

The only time you had a time period was when using some of the triviality options. However, they are effectively being abolished with money purchase schemes. So, the time rule wont exist any more.

Melmar

Am I correct in thinking that I would be able to take up to 30k tax free from my pension pot.


What counts as pension pot, is it just company pensions or do National insurance contributions also count towards the pot?

atush

You can't take 30K in tax free cash from your pot unless it is 120K pot.

You can take 30K from a pot (after april if you are 55+) as long as it is 30K or over. Only 25% will be tax free.

You can take up to 30K now, if you are 60 and the 30K or less pot is all you have.

NI does not count, that is your state pension. If you had contracted out of the state second pension over the years, that may be in a DC pot somewhere.

Dollypeg

Hi all, I cashed in a small pension 5 years ago when I was 50, and I get a small pension each month, with the new rules on pensions would I be entitled to take the rest, or am I tied into the monthly payments.

dunstonh

Am I correct in thinking that I would be able to take up to 30k tax free from my pension pot.

Only if your pension is £120k. The 25% tax free lump sum will remain 25%. The rest is taxable subject to income tax above your personal allowance.

What counts as pension pot, is it just company pensions or do National insurance contributions also count towards the pot?

A pension fund is the value of your pension fund. it doesnt matter if it is made up of contributions from your own money, employer or contracted out rebates.

dunstonh

Dollypeg wrote: »

Hi all, I cashed in a small pension 5 years ago when I was 50, and I get a small pension each month, with the new rules on pensions would I be entitled to take the rest, or am I tied into the monthly payments.

You cant cash in a pension. You bought an annuity with the pension. You no longer have a pension and the new rules do not apply to you.

Melmar

Still a bit confused, Sorry.


If I have two pensions from two different companies that counts as two pots. Is this correct?


If one pot was £50k and the other was £25k
Would I be allowed to take all of the £25k tax free or only 25% of it tax free?


cheers

jamesd

You can take a quarter of each pot tax free. You can combine them and take a quarter of the combined pot tax free. You can split them into twenty pots and take a quarter of each of the twenty pots tax free. You get a quarter of as many pots as you like tax free. Not more than a quarter.

Beyond that 25% the rest is added to your normal taxable income in the year in which you take it and you're liable for income tax on it just like pay.

atush

Basically it is 25% tax fre from each pot unless you combine or split them.

So you can take 25% tax free (or more taxed) from pot 1 and leave pot 2 untouched.

You could take 25% TF from both pots and leave the rest to grow.

You could transfer both pots into one pot and take 25% of both overall,. and leave the rest to grow.

What is best for you will depend on your exact pensions, and your overall financial position.

Melmar

So what's the difference between the old system and Osbornes reforms.