How long does procedure take?
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It probably means you cant do what you want to do with that pension.
You want to do income drawdown. An option that is not new and has been available for almost 10 years. It is rare for any occupational pension to offer income drawdown. Typically, you would have to transfer the pension to one that offers income drawdown.
I want to take the whole of my pension as a cash lump sum (25% tax free 75% taxed), the pension provider has confirmed this is an option.
The original post was asking how long the process took, I assumed it meant how long before you get your money and I was wondering the same thing too.MFIT #73 - Pay all mortgage off in 3 years[STRIKE] £46,400[/STRIKE]£34,295 PAID £12,1050 -
I want to take the whole of my pension as a cash lump sum (25% tax free 75% taxed), the pension provider has confirmed this is an option.
The original post was asking how long the process took, I assumed it meant how long before you get your money and I was wondering the same thing too.
Do you know how much tax you will pay on that 75%?Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.0 -
We don't feel that there is any pension freedom.
There is. However, if you dont have a product that allows it then you move it to one that does.A local radio had a financial adviser on a month ago. he says the pension freedom has not been set up to benefit the pensioner but the government who expect to make over £1 billion in extra tax in the first year because people will get sick of trying to work out what to do and say sod it take the lot, even if it results in a high tax bill that year.
Yes. There will be people that fail to get advice or guidance who will do silly things which create an extra tax bill. However, people do silly things every day.he will reconsider his choice but looks like it may be an annuity, for the simple reason it will cost less (fees to move and set up new fund and costs to run could be, we have been told at least £2,000 then ongoing fees to re-invest every three years if drawdown).
Comparing a product with implicit charges and assuming there are none with a product with explicit charges and assuming it is worse because of that is not a good idea.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I want to take the whole of my pension as a cash lump sum (25% tax free 75% taxed), the pension provider has confirmed this is an option.
Sorry. I hadnt realised that you were not the OP when I posted. I was linking your post to the person that created this thread. Sorry for the OP for helping take this thread off topic.The original post was asking how long the process took, I assumed it meant how long before you get your money and I was wondering the same thing too.
No. What you want to do is different to what the OP wants to do. You want full fund withdrawal. The OP wants income drawdown.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Hubby has a CAB pension interview next week to get a better idea of what is available under new rules, then he will reconsider his choice but looks like it may be an annuity, for the simple reason it will cost less (fees to move and set up new fund and costs to run could be, we have been told at least £2,000 then ongoing fees to re-invest every three years if drawdown).
Even if he wanted a guaranteed income it would normally be ridiculous to buy an annuity, with those reaching state pension age from 6 April 2016 able to get an increase of 5.8% for each year they defer their state pension, roughly double the inflation-linked annuity rate. A complaint to the administrators that they are pushing their members into poor a poor income choice by only allowing annuity purchase vs the far better option of deferring the state pension would be appropriate.
Use some care with the CAB advice. They might not even bother to mention the option of deferring the state pension. Like many places they may still be stuck on the old fashioned annuity is the way to get income approach.
If he was to take the lot, 75% would be added to his taxable income for the year and tax would be due on it like normal income. Depending on the amounts that could leave him paying as much as 45% income tax. The gradual drawdown route available at no direct cost from places like Hargreaves Lansdown lets him gradually take the 75% of taxable money out to stay in basic rate income tax range, assuming he's not already a higher or top rate tax payer.
If you just want som ehelp getting things done give Hargreaves Lansdown a call. Note that they are not cheapest if he wants to take out all or all but £1,000 in the first year, they have a £200 charge for closing the account in that situation. Virgin doesn't. But HL are great for helping you to sort out how to get the money out, to them. Their charge is 0.45% of the pot size a year, charged in monthly pieces on the amount still in the pot.We don't feel that there is any pension freedom. If there is its at a high price.A local radio had a financial adviser on a month ago. he says the pension freedom has not been set up to benefit the pensioner but the government who expect to make over £1 billion in extra tax in the first year because people will get sick of trying to work out what to do and say sod it take the lot, even if it results in a high tax bill that year.0
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