Tax on Flexible Drawdown with no other income

pinkforfloyd

i've had some great advice from here in the past so I' hoping you can help again.
I plan to take my 25% TFLS in 2016 age 60. If I have no other income until 65 but decide to draw yearly upto my tax free allowance from the remaining pot, will those amounts also be tax free as the allowance suggests? Thanks.

OldBeanz

Yes. The change in pensions policy has massively benefited those who had saved into a second pension which they can take without touching their main work's one. Most especially women who had the goal posts moved by five years in the nineties.

pinkforfloyd

Thanks OldBeanz. So effectively I can have 25% TFLS + all my tax free allowances to 65! Is that correct?

jem16

pinkforfloyd wrote: »

Thanks OldBeanz. So effectively I can have 25% TFLS + all my tax free allowances to 65! Is that correct?

Yes it's correct.

System

If it's Flexible Drawdown, ie under the old rules, don't you have to have a minimum pension income from elsewhere to qualify?

If it's under the new rules, not yet approved, then I think it is called something else.

pinkforfloyd

Thanks you all for your prompt replies! Happy New Year!

jamesd

Yes, from 6 April 2015 if you have a defined contribution [STRIKE]benefit[/STRIKE] or personal pension you can take out whatever you like and it's normal taxable income after the 25% tax free lump sum. Since your state pension won't have started yet it will be to your advantage to take out as much as possible up to your personal allowance and put it into a S&S ISA to reduce your total tax bill once the state pension starts for you.

dunroving

jamesd wrote: »

Yes, from 6 April 2015 if you have a defined benefit or personal pension you can take out whatever you like and it's normal taxable income after the 25% tax free lump sum. Since your state pension won't have started yet it will be to your advantage to take out as much as possible up to your personal allowance and put it into a S&S ISA to reduce your total tax bill once the state pension starts for you.

Should this say "defined contribution"? I didn't think the new rules could be applied to a defined benefit pension without converting it to defined contribution (which isn't usually advisable, because the terms of a defined benefit pension are usually better)?

pinkforfloyd

Thanks dunroving for the correction. It is indeed a Defined Contribution I will be taking from until my Defined Benefit kicks in at 65. Thanks to jamesd for confirming the best options.:T

jamesd

Yes, I meant defined contribution, thanks!