Pension

hayleydaley

Recieved a statement which I requested from an old employer about my pension as to what the value is. Listing ways to take the pension then on another letter Trivial Commutation Lump sum. If I take the lump sum it will discharge the trustees of all liability of the pension scheme. No mention of paying tax . Any one clarify this for me .

xylophone

http://www.litrg.org.uk/tax-guides/pensioners-tax/how-do-i-cash-in-my-small-pension-trivial-commutation

might be of interest.

LHW99

25% will be tax free, 75% taxed at your highest rate.

So if its worth £1000, £250 would be tax free, £750 would be taxed at 20% if you would still be a basic rate taxpayer, or if it took you into the 40% band, then part or all would be taxed at 40%.
(If your income the year you took it was at least (in this example) £750 below the zero rate threshold it would all be tax free)

kidmugsy

hayleydaley wrote: »

Recieved a statement which I requested from an old employer about my pension as to what the value is. Listing ways to take the pension then on another letter Trivial Commutation Lump sum. If I take the lump sum it will discharge the trustees of all liability of the pension scheme. No mention of paying tax . Any one clarify this for me .

If the 75% were to be taxed, you could always get the tax back by contributing the money into a personal pension of some sort, from which you could withdraw at a time when your income tax position is more favourable. Presumably you are past age 54?

xylophone

Presumably you are past age 54?

In a post in October 2013 the OP said that she was 60 and due to receive state pension in 2017, so assuming 62 at the moment.

In other posts she said that she is no longer working but living on the capital from the sale of a house - she has three old pensions which she has not yet taken.

https://forums.moneysavingexpert.com/discussion/comment/67394593#Comment_67394593

One is 27000 pot not really big compared to what some others have.
2nd is 7000
3rd is 3000