Cash Lump sum mutiple pensions

Hullbiker

I have 2 pension pots, pot 1 is an old pension that I no longer contribute to and has a fund value of approx £16000, pot 2 is a company pension scheme which I contribute to on a monthly basis it has a fund value of approx £80000.


I would like to take pot 1 as a cash lump sum and leave pot 2 as is. Is this possible?


I have been told by the pension company of pot 1 that I can take this as a lump sum but will only get £12000 with £3900 as a tax deduction, is this correct, they haven't asked about other the pension.


Will taking this lump sum effect my pot 2 pension in any way?


Thanks in advance

kidmugsy

Hullbiker wrote: »

pot 1 is an old pension and has a fund value of approx £16000, pot 2 is a company pension scheme which I contribute to on a monthly basis it has a fund value of approx £80000.


I would like to take pot 1 as a cash lump sum and leave pot 2 as is. Is this possible?

Not if what you want is to get the money out tax-free. is it possible to take the tax-free lump sum from the second pension by leaving and then rejoining the scheme?

Hullbiker

Thanks Kidmugsy,

I don't mind too much paying tax on pot 1, but don't want it to effect pot 2 as it's a company scheme and gives good returns.

Regards

dunstonh

I would like to take pot 1 as a cash lump sum and leave pot 2 as is. Is this possible?

Depending on the type of pension, in most cases, yes it is possible.

I have been told by the pension company of pot 1 that I can take this as a lump sum but will only get £12000 with £3900 as a tax deduction, is this correct, they haven't asked about other the pension.

They dont need to know about the other pension. They automatically tax it as month one earnings.

I don't mind too much paying tax on pot 1, but don't want it to effect pot 2 as it's a company scheme and gives good returns.

Do you actually need the pension? Paying tax unnecessarily is not a good thing.

david78

You can take tax free cash from one pension (A) and not the other (B). However the value you take must not exceed 25% of the value of A. You cannot combine the pension values and take 25% of (A+B) from pension A.

Hullbiker

Thanks to everybody for the info, it was really helpful.

And in answer to the question, do I need the cash, well at the moment yes as I have some house repairs/mods to sort and some high interest bills to pay so in the long I think it will be more valuable than consolidating.

Thanks again.