Pensions

Pincher

dunstonh wrote: »

Doing nothing and not paying £1000 can actually cost you more.

Ideally, my retirement will coincide with the return of 10% annuity rate, and the £1,000 can add to the annuity.


So, do nothing can also save money.

hayleydaley

State pension due Mar 2017 not sure how much it will be sent off for a statement.

Pincher

hayleydaley wrote: »

Just to recap
Stakeholder pension. 28,000
Final salary. 24,000
Final salary can take pension of 1671pa or cash lump 7838 with a pension of 1175 pa

Would it be possible to take one in each tax year so as not to go into the 40% band

hayleydaley wrote: »

I have retired no income.

hayleydaley wrote: »

State pension due Mar 2017 not sure how much it will be sent off for a statement.

"I have retired" conflicts with "State pension due Mar 2017"


Money in pension pots do not count towards state benefit calculations. Drawn down and adding to your conventional savings may reduce your state benefit entitlements.


It is dubious that your Final Salary scheme will allow you to draw down for a start. With recent events, even transferring out could be blocked.


Theoretically, I suppose you can drawn down £14k per year from the Stakeholder pension, and pay near to nothing in tax.

mgdavid

"Just to recap
Stakeholder pension. 28,000
Final salary. 24,000
Final salary can take pension of 1671pa or cash lump 7838 with a pension of 1175 pa
Would it be possible to take one in each tax year so as not to go into the 40% band"

the OP is so short of detail that it's impossible to make sense of it; without the hard detailed facts we are all guessing what he means.

xylophone

"I have retired" conflicts with "State pension due Mar 2017"

Not at all - a person can retire from work (and draw his occupational pension) but not yet have reached state pension age.

hayleydaley

mgdavid, cannot see what other info there is to say. Please clarify

hayleydaley

I have 3 seperate pensions

xylophone

You have previously indicated that you have a Final Salary Pension and two defined contribution pensions.

Apparently your FS pension offers £1671pa or a pension commencement lump sum of £7838 with a pension of £1175 pa.

The PCLS is tax free.

Presumably you have decided to take the lump sum and a pension of a little under £100 a month.

The DC pensions

(a) £24, 630

(b) £24,000.

With respect to (a) (which presumably you have not yet accessed

https://forums.moneysavingexpert.com/discussion/comment/67919899#Comment_67919899)

on or after 6 April you will be able to take out 25% tax free - the rest will be taxable at whatever rate of tax is appropriate to your circumstances.

With regard to (b), on or after 6 April you will be able to take out 25% tax free with rest taxable at what ever rate is appropriate to your circumstances.


So you could end up with tax free cash of £7838+£6157+ £6000 - presumably this is to be used as you indicated in a previous post to make a cash gift to your son as a deposit on a house?

You indicated in a previous post that currently you are living on the proceeds (capital and interest?) of a house sale.

In the new tax year your income will consist of the interest on the capital sum, plus your FS pension, plus whatever you might choose to draw from the remainder of the DC pots.

The basic single person tax allowance for 2015-16 will be £10,600.

With regard to tax on savings income see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293747/Fact_sheet_template_-_10__tax_9.pdf


You indicate that you are seeing an IFA.

https://forums.moneysavingexpert.com/discussion/comment/68068941#Comment_68068941

jem16

hayleydaley wrote: »

Just to recap
Stakeholder pension. 28,000
Final salary. 24,000
Final salary can take pension of 1671pa or cash lump 7838 with a pension of 1175 pa

Your Final Salary pension would not be taken in full, so you are either going to take no tax-free lump sum and £1671pa of taxable income or you are going to take £7838 tax-free cash and £1175pa taxable income.

So from that scheme it's £1671 or £1175 that will be taxed.

Your stakeholder pension you are presumably going to cash in fully. 25% will be tax-free so £7000 is tax-free. That will leave £21,000 to be taxed.

So taxable income will either be £1671 + £21,000 = £22,671

Or

£1175 + £21000 = £22175

Neither of these two amounts will bring you into the higher rate tax band if you have no other income so both can be taken without any fear of 40% tax.

What happened to the other Defined Contribution pot that you were in the process of cashing in when we told you to stop as you were breaking rules? You don't seem to have mentioned that here.

Pincher

xylophone wrote: »

Not at all - a person can retire from work (and draw his occupational pension) but not yet have reached state pension age.

Maybe I should have said it throws up some issues that may or may not apply. The OP is potentially still able to claim Job Seeker Allowance, or get NI credit for being a carer or other reasons.


I have not had a penny of earned income for over 15 years, because I have property income, but if I put down my occupation as "retired" for car insurance, they could try to refuse any claim for falsely declaring my occupation.