can I take out a pension

nowreetired

jamesd wrote: »

Up to about seven weeks. It depends on how long the pension firm takes to accept a payment into the pension then pay it out as a lump sum if requested. HMRC pays firms the tax relief late in the month after the contribution so the exact time depends on whether the firm will wait for that before paying out.

Before 6 April 2015 the small pots rule can be used up to £10,000 in the pension, from 6 April the UFPLS or flexi-access drawdown allows access to the whole pot of any size as a lump sum.

For deferring the state pension the break even period ranges from about 9 years to about 12 years depending on income tax rate, the lower end within the personal allowance, the upper at basic rate. This is for those who reach state pension age before the flat rate comes in and who get the 10.4% a year deferral rate.

Deferring is good if you want to increase income. Just putting the money into a pension is good if you want to build up a lump sum either for later use or for inheritance. If you're in normal good health you'd do better on average by deferring then investing the higher income - you'd build up a bigger lump sum this way before you die. On average, of course.

Unless your don't have good health or need a lump sum quickly I suggest that you defer the state pension then either spend or invest the extra income when you take it. Odds favour up to three years being good for men, five for women. More can pay but there's an increasing chance of dying before getting ahead as you increase those times. Longer times can be good if you want to use this to create what is effectively long life income insurance, since this is inflation-linked for life. At 68 you're already into the over three years range since these numbers are based on starting at state pension age. Still a year or two is a good deal and well worth doing.

Thanks wish I had know this when I was paying 40% tax

Can you tell me what happens if I defer but die before I take the pension , is it just lost or does the residue go to my estate?

nowreetired

nowreetired wrote: »

Thanks wish I had know this when I was paying 40% tax

Can you tell me what happens if I defer but die before I take the pension , is it just lost or does the residue go to my estate?

anyone have a link to the pensions website where it explains deferring ?

jem16

nowreetired wrote: »

anyone have a link to the pensions website where it explains deferring ?

Try https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/372517/dwp024-102014.pdf

Freecall

nowreetired wrote: »

anyone have a link to the pensions website where it explains deferring ?

Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.

Try entering 'defer state pension' here - www.google.co.uk