Advice re very small pension

Carol_Smiley

I already am in receipt state pension and several small private pensions - I have a very small pension pot with Standard Life which is due end of Sept this year when I will be 65.

I plan to take as a lump sum (less than £2500). If I take end Sept I will have to pay tax on it after first 25%. Are there any advantages if I leave it lying till April 2015 and then taking as lump sum?

Kind regards
C

kidmugsy

Carol_Smiley wrote: »

I already am in receipt state pension and several small private pensions - I have a very small pension pot with Standard Life which is due end of Sept this year when I will be 65.

I plan to take as a lump sum (less than £2500). If I take end Sept I will have to pay tax on it after first 25%. Are there any advantages if I leave it lying till April 2015 and then taking as lump sum?

Kind regards
C

One way to avoid tax on it might be, depending on the size of your current pensions, to suspend ("defer") your State Pension for the rest of this tax year and then restart it next tax year.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/299286/dwp024-apr-14.pdf

Your_Hero

Carol_Smiley wrote: »

I already am in receipt state pension and several small private pensions - I have a very small pension pot with Standard Life which is due end of Sept this year when I will be 65.

I plan to take as a lump sum (less than £2500). If I take end Sept I will have to pay tax on it after first 25%. Are there any advantages if I leave it lying till April 2015 and then taking as lump sum?

Kind regards
C

It depends what your total income is for the year. If it's below the Personal allowance currently, i.e. £10,000 or so, then some of your pensions that you draw out may be under the PA and be tax free also (on the 75% portion). Therefore you may wish to draw out each pot over a few tax years to make use of the tax-free allowance.