Pension Advice

tasha-harley

I am due to receive my state pension in February which is estimated at £154 per week.
I took early retirement in 2012 and took a lump sum from my final salary scheme and have a pension of £4392.16pa.
My wife also retired in 2012 and she is in receipt of her state pension and small company pension.
We both have savings in a cash ISA.
I have two private pensions:
One with Royal London which is £9000.00
And one with Prudential for 27000.00
I am wondering if it would be best to take the smaller pension with Royal London in February as a lump sum and to leave the Prudential one until after April. Any advice on the pros and cons on doing this.

greenglide

Best in what way?

Why, exactly, do you want to take either pension as a lump sum, either now or next year? This is the key before anyone can answer.

kidmugsy

greenglide wrote: »

Why, exactly, do you want to take either pension as a lump sum, either now or next year? This is the key before anyone can answer.

True, but I might in those shoes decide to empty the pensions and move the money into ISAs while the Tax-Free Lump Sum survives, and the basic rate of tax remains at 20%. If that were my motive I might take proportionately more in this tax year if there were ISA capacity to absorb the sums.

On the other hand, the ability to leave pensions so that the inheritor pays no tax (if the holder died before age 75) might persuade me to withdraw no more than the tax-free sums and leave the rest in the pensions indefinitely. (And for the sake of simplicity I might anyway amalgamate the pensions.)

atush

Seems like you have more PA going spare this year so I might be inclined to take the lump sum from both now and take income up to GAD. Then suspend income in the new tax year and DD what you like when you need it? But the new DDs after april will be taxed at BR because you will be over your PA.

Will save a bit of tax.