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Lump Sum Pension Advice Please......
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londondealer
Posts: 203 Forumite

Just need some advice with regards to taking the lump sum element from my pension.
I am in a final pension salary scheme and my lump sum is going to be 70k.
I also have another pension fund that i paid into separately and that total i can draw out will be 16k. I hit the big 55 in August and want to take out as much as i can given its tax free for now!
Am i able to take both lump sum amounts out?
Many thanks in advance.
I am in a final pension salary scheme and my lump sum is going to be 70k.
I also have another pension fund that i paid into separately and that total i can draw out will be 16k. I hit the big 55 in August and want to take out as much as i can given its tax free for now!
Am i able to take both lump sum amounts out?
Many thanks in advance.
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Comments
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The pension commencement lump sum for your DB scheme is tax free.
If you have a separate private scheme 25% of that can normally be taken as a PCLS as well. However the rest is classed as income whether you take it as an Annuity or as drawdown. So it will count towards the £11K per annum personal allowance you have before you pay tax.0 -
For final salary schemes it depends on the scheme rules, and is likely to be reduced if you take it before the scheme's normal retirement age0
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Is 55 Scheme Normal Pension Age?0
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I hit the big 55 in August and want to take out as much as i can given its tax free for now!
So, you want to take it out of a tax free environment to bring it into a taxable one?
Can you access it without penalties at 55? (55 is early for most defined benefit schemes and you would expect a penalty).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'm thinking I need some advice and good advisors out there?0
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it's unlikely you'll be able to take the tax-free cash without also triggering the taxable income too, on the DB scheme.0
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londondealer wrote: »I am in a final pension salary scheme and my lump sum is going to be 70k.
For most defined benefit pensions it's also a bad idea to take a lump sum but there are some exceptions. Usually the commutation rate of lump sum to income given up is poor.londondealer wrote: »I also have another pension fund that i paid into separately and that total i can draw out will be 16k. I hit the big 55 in August and want to take out as much as i can given its tax free for now!
Given that you'll be 55 soon you're in a great position to pay lots of money into a personal pension to maximise your tax gain.0 -
So, you want to take it out of a tax free environment to bring it into a taxable one?
Can you access it without penalties at 55? (55 is early for most defined benefit schemes and you would expect a penalty).
Don't the police force retire at 55?
In the civil service I think we lose 5% for each year early you take your pension, and by that I mean the Classic scheme, it's probably different now. fj0
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