Defined Benefit and Defined Contribution plans - Lump sum questions

Davew1963

Afternoon all.
I have a Defined Benefit plan, now closed but still getting RPI increases. This is due to be taken at 60.
I am now in a Defined Contribution scheme, also due to be taken at 60.
My questions are related to the new rules introduced by the government -

1/ If I were to leave my current employer at 55, can I leave my DB scheme untouched and just start taking lump sums from the DC scheme.
2/ If I put a lump sum from my savings into the DC scheme, would I get any tax breaks or does that have to be done from my salary to gain any tax breaks?
3/ If I can put a lump sum in, what's the yearly limit?

Thanks

Dave

atush

1/ your pensions aren't linked so you can take from your DC pension and leave the DB one alone.

2/3 The annual limit is 40K or your income whichever is lower. you can use money from savings to make the contrib, but you have to have the income to cover it.

Linton

1) The DB and DC pensions are almost certainly separate and so you will be able to access one before the other. You may wish to check with your employer's pension people. You may well find that to take lump sums from the DC pension you will need to transfer it elsewhere first. The DC pension itself probably wont support drawdown. But with those caveats yes. Note that taking lump sums from your DC pension may limit your options if you are continuing to put money into another pension at the same time.

2/3) Legally the money can come from anywhere and will receive the tax breaks as long as the total in a year is less than both your gross earnings and £40K. The £40K includes employers contribution. However you will have to check whether your employer's scheme permits lump sum payments.

If there are any problems there is no reason why you shouldnt set up a private pension independent of your employer. You would still get the tax breaks.