How much tax will I pay ?

Angelajoy1961

I have a drawdown pension and I have already taken 25% tax free this year but now want to take another £10,000. I have a personal allowance of £11500 so will my £10000 be tax free ?

Silvertabby

Yes, as long as you have no other taxable income.

Have you told HMRC to apply your tax code to your pension?

Angelajoy1961

I'm assuming that was done years ago when I got my pension ?

xylophone

I'm assuming that was done years ago when I got my pension ?

Can you explain the above?

https://forums.moneysavingexpert.com/discussion/comment/73229106#Comment_73229106

I receive esa, child benefit, child tax credit, housing and council tax benefit and DLA

Had you considered the effect on your benefits?

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/417473/pension-flexibilities-dwp-benefits.pdf

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS91_Pension_Freedom_and_benefits_fcs.pdf?dtrk=true

davieg11

I doubt it will be tax free if your already earning thousands of pounds from the state. You'll then lose these benefits for a year when it flags up.

Angelajoy1961

I owed my mum £20,000 that she loaned me and my husband (now ex) when we bought our house. When we divorced the house was sold but we had negative equatity so I got nothing. As soon as I could take some money out of my pension I took it out and paid her back some of what I owed. She now needs to do some work on her house so I want to pay her back the rest of what I owe her. She is 83 and is having panic attacks about her house needing the work and I want to stop feeling guilty about the money I still owe her !

Angelajoy1961

I also have some credit card debt that I want to clear with what's left.

xylophone

You have seen https://forums.moneysavingexpert.com/discussion/comment/73229106#Comment_73229106

xylophone

Read links in 4 above.

enthusiasticsaver

Any pension withdrawals over and above the 25% lump sum are liable for tax. Obviously if you are not taking a monthly pension the withdrawals will be offset against your allowance.

I think any pension withdrawals (including the TFLS) will affect benefit claims regardless of whether you used them to repay debt or not.

sheramber

I'm assuming that was done years ago when I got my pension ?

You say you got your pension years ago- can you explain if you took money out then?

Any money you receive will affect your means tested benefits.

Paying off debts that do not need to be paid will be considered deprivation of capital.