draw pension or not

mostyn54

hi can anyone tell me as from april 2015 i will be eligable to draw my defered pension if i do a draw down after takeing the 25% cash is this classed as a income if i am made redundant

jem16

mostyn54 wrote: »

hi can anyone tell me as from april 2015 i will be eligable to draw my defered pension if i do a draw down after takeing the 25% cash is this classed as a income if i am made redundant

As you mention a deferred pension, I am assuming it's a Defined Benefit pension?

In this case you cannot take the lump sum without commencing the pension and yes it's classed as income.

atush

If it IS a DB pension do clarify.

If it is instead a DC pension, not the 25% TFLS is not considered income. But is savings should be relying on other means tested benefits.

Basically check with CAB that you might not be better off if you dont take the pension.

mostyn54

its a stakeholder sorry

xylophone

How old are you?

This is a pension to which you no longer contribute?

Do you have other pension provision over and above the state pension?

Will there be a redundancy pay out?

mostyn54

DI do not contribute to this pension actually I have two I also have final salary which I do not want to take at the moment age 56 this year

atush

at 56, with a DC stakeholder pension you should be able to flexibly draw it from next april. However, you might have to transfer it first- no one knows yet who is changing to fit within the new rules. You can call your provider and ask if they will allow such withdrawals from April. If they wont, you will have to transfer.

Second, think twice about taking anything other than your 25% tax free if you are still working, as any more will be taxed at your highest rate. You would be better off taxing the 75% taxed portion once you actually retire and have no income (ie if you retire before your DB pensions start) as you could use your PA to withdraw it tax free.

xylophone

Your current employer is providing the DB scheme?

If you are made redundant, it will be with a redundancy pay off but pension deferred to Scheme Pension Age?

With regard to benefits, you might find that a large amount of capital would mean that you would not qualify for means tested benefits?

Presumably if you were actively looking for work you would sign on and probably be eligible for contributions based JSA, but if you accessed more than the tax free lump sum, and the resultant pension payments were more than a certain amount, the JSA could be reduced on a £1 for £1 basis?

You might try the Benefits board to check this out?

You might wish to obtain a state pension statement for future planning. https://www.gov.uk/government/news/millions-more-offered-free-pension-statement