Retirement planning endangered by taking any pension

System

jamesd wrote: »

Clifford_Pope, any income from any pension pot would trigger the reduction. The PCLS could be taken from any number of pots without triggering the reduction.

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Still not clear.

So taking 25% from a tiny pot would trigger the bar on all/any pots ?

But taking 24.999 % from a large pot would not?

jamesd

Neither of those would trigger the bar unless the pension concerned had a tax free lump sum limit lower than the usual 25%.

Taking one penny of income from either of those pots would trigger the limit, even if no lump sum was taken.

Once triggered the limit affects all future contributions, not clear yet what happens to the limit in the year in which it is triggered if contributions in that year are already over the limit.

System

jamesd wrote: »

Taking one penny of income from either of those pots would trigger the limit, even if no lump sum was taken.

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So someone who had a small pension from a previous employment but continued working would face the limit on contributions in respect of the ongoing employment?
It sounds like a very discriminatory restriction on older workers, late-developers, entrepreneurs, people building up a business in later life after early retirement.

Wouldn't it have been simpler just to have a time restriction before tax-enhanced contributions can be withdrawn tax-free?

jamesd

Yes, they would. I'm inclined to agree about the time restriction as a way of stopping what the document described.