Partial retirement Civil Service

Tony_Geo

Question about Partial Retirement from Civil Service Classic.

I understand what partial retirement is but my question is does taking it affect the Annual Allowance in terms of being able to contribute to a separate SIPP? Or does that only happen when you stop work entirely?

AnotherJoe

I don't know about the civil service pension but I don't see how they can interfere with what you do with your own private pension separate to the CS one.

GunJack

AnotherJoe wrote: »

I don't know about the civil service pension but I don't see how they can interfere with what you do with your own private pension separate to the CS one.

aren't there overall limits of what you can pay into a pension a year (up to your salary), so is this question more about " is the part-time salary minus the continued CS pension contributions the limit of what the OP can pay into his SIPP in a year?"

xylophone

http://www.civilservicepensionscheme.org.uk/media/95435/pr1_v10_dec15.pdf

Links in post 2 may be of interest.

https://forums.moneysavingexpert.com/discussion/comment/72766773#Comment_72766773

Tony_Geo

Xylophone, Thanks for that.

If I under stand correctly if I take part of a DB FS Pension (like Classic) and so reduce my hours and working week by say half, I could still contribute to a SIPP up to the amount of my reduced annual earnings.

The annual allowance would only drop to £10K if I drewdown from the SIPP.

xylophone

Are you continuing to contribute to the CS pension as well?

http://www.pruadviser.co.uk/content/knowledge/technical-centre/annual_allowance/

https://www.gov.uk/tax-on-your-private-pension/annual-allowance

Tony_Geo

Yes, that is the basis of partial retirement but the contributions would be proportionately less. I appreciate that the contribution limit into a SIPP would need to allow for the increase annually in the value of the DB pension still accumulated (ie be within £40K in total).

My concern was that partial retirement would trigger the rule that capped the AA at £10K or less rather than £40K. The Steve Webb piece indicates that this will not be the case as I read it as that rule was to stop recycling once flexible access to a pension fund was made.

The links above suggests that you need a pension pot that you have started to flexibly drawdown from in order to trigger this AA change.

xylophone

Drawing a DB pension does not trigger the MPAA.

http://www.retirementadvantage.com/downloads/the-money-purchase-annual-allowance-factsheet.pdf


When does the MPAA not apply?
It’s important to be aware there are a number of ways of taking some or all retirement benefits without triggering
the MPAA. These include –
• Taking a pension commencement lump sum only (tax-free cash)
• Moving to a flexi-access drawdown contract and taking no income
• Receiving income from a defined benefit scheme
• Receiving income from a standard lifetime annuity
• Taking income from a capped drawdown contract within the GAD limits
• Receiving a scheme pension from a money purchase scheme with 12 members or more
• Receiving a small pots lump sum or trivial commutation lump sum
• Taking income from a beneficiary’s flexi-access drawdown contract

Tony_Geo

Xylophone, many thanks this is very clear. Thanks for all the links.