withdrawing from drawdown pension can any one help?

della1234

Hi,

This is my first post here, but have been reading for a while.

I have £57000 with met life. Last year I took a 25% tax free cash lump sum and put pension in to drawdown, I have not taken anything else since.

I now wish to take the remaining £57k, Can I do this by taking another 25% tax free sum then the rest taxable?

If I have no other income for the year could any one possibly help me work out how much tax I would pay?

and if I went ahead and did this, how long would it all take?

Thank you:)

dunstonh

Can I do this by taking another 25% tax free sum then the rest taxable?

No. If you take it in one tax year then the whole 57k will be added to your income in this year and you will be higher rate tax on it.

Why would you want to do this?

xylophone

You have already taken your 25% tax free lump sum - no more bites at that cherry.

If you withdraw the whole of your pension, it will be taxed as income in the year you receive it.

You have your personal tax free income allowance for the year.

https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2015-16/tax-and-tax-credit-rates-and-thresholds-for-2015-16

Good_bad_and_ugly

Della,

Only you will determine if/why you need it. Would it make sense/ is it possible to straddle the instruction over two financial years at the start of next April?

della1234

Ahh thank you for that.

So for instance if I take £30k, and have no other income, I will be taxed 20% on £19400 ?

Thank you

della1234

Do I still need to make payments in to the pot if I leave the rest until next year?
thank you again

Good_bad_and_ugly

Yes, but if you don't know how much you'll need, consider a monthly income amount instead of big annual amounts to keep tax costs down. No, no need to make further contributions.

della1234

Just seen this on the gov.uk website,

"Cash from a defined contribution pension scheme
You may be able to withdraw cash directly from your pension pot if you’re in a defined contribution pension scheme. You can either withdraw:

your whole pension pot - 25% is tax free
smaller cash sums - 25% of each sum is tax free
These are called ‘uncrystallised funds pension lump sums’ (UFPLS)."

I have no idea if mine is a defined contribution scheme.

It's all very confusing lol.

Good_bad_and_ugly

Did an IFA transfer you into Met Life, a few years ago?

della1234

Yes



Was with standard life

Good_bad_and_ugly

Ok, it'll be a DC then. Just confirm though!

Why did the adviser suggest you change (and when?)?