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Transfer of penson after 25% tax free lump sum taken

Just wondered if I took my 25% tax free lump sum from my pension and then transfered it to another pension provider, whether the new pension provider would automatically know that the 25% had already been taken.

Maybe I could have another 25% :beer: :bdaycake:

Comments

  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    I'm sure you know the answer to that one. ;)

    After you take your 25% out, you won't have a pension plan any more.You will either have an annuity or an income drawdown plan, or, if you are 75 years old or more, an ASP.
    Trying to keep it simple...;)
  • EdInvestor wrote: »
    I'm sure you know the answer to that one. ;)

    After you take your 25% out, you won't have a pension plan any more.You will either have an annuity or an income drawdown plan, or, if you are 75 years old or more, an ASP.

    No i am pretty sure that ever since "A day" last year you can take your 25% lump sum at any time over the age of 50 and leave the other 75% unchanged.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    Not so, check it out.
    Trying to keep it simple...;)
  • EdInvestor wrote: »
    Not so, check it out.

    Gimme a link then
  • dunstonh
    dunstonh Posts: 118,562 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    If you take the 25% it changes the pension from uncrystallised to crystallised. This affects death benefits amongst other things. So, the new provider will be aware.
    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.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    The actual mechanism of doing this is called "taking benefits", "vesting" or more recently "crystallising" your pension. This involves taking the tax-free cash and then either buying an annuity or an income drawdown plan with the remainder.

    The new rules for income drawdown allow you to take nil income.So it may appear that you are just taking out the 25% and leaving the rest behind.But in fact it is a lot more complicated (normal for pensions!) and will usually involve moving the fund to another provider.

    Details here:

    http://www.capitasipservices.co.uk/ROOT/SIP/57945/57951/page57951.asp?
    Trying to keep it simple...;)
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