cashing in at 55

witch777

If I totally cash in my pension at 55 I believe I would get the first 25% tax-free.
If the remainder, added to my salary, exceeded the higher tax band.........would I only be taxed the higher rate on the amount by which it exceeds it..............or would I pay the higher rate of tax on the full amount?

Triumph13

If you were crazy enough to do this then anything over the 25% is taxed as if it were income in that year so it would first use up any remaining basic rate band, then the higher rate band and then 45% on anything above that.

Linton

And then you would be limited to £4K/year, including employers contribution, should you wish to add to your pension(s) om the future.

xylophone

http://adviser.royallondon.com/technical-central/pensions/benefit-options/emergency-tax-and-lump-sum-withdrawals/

dunstonh

Linton wrote: »

And then you would be limited to £4K/year, including employers contribution, should you wish to add to your pension(s) om the future.

And that figure is not cast in stone. It can be amended. It was recently reduced to £4000 from £10,000 and there have been recommendations made that they further reduce it to £3600 to aid in simplification (doesnt mean it will happen but you need to be prepared for it).

"cashing in" a pension at 55 is going to be a very bad idea for the majority of people considering it.

westv

Why are "simplifications" never good? :rotfl:

atush

And what will you live on at 65, 75 or 85 once you have drawn this money, paid extra tax on t, then spent it?

ffacoffipawb

westv wrote: »

Why are "simplifications" never good? :rotfl:

More importantly, why are pensions "simplifications" never pensions "simplifications"?