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Can I Cash my Pension Plan?
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IvyJay
Posts: 56 Forumite
Hi Guys
I'm a full-time landlord but some years ago I used to work for a large private company that had a non contributory pension scheme. I'll be 55 within the next 6 months and have received a letter from Aviva that the value of my plan is around £20k. I realise that no-one can give me specific advice but I am wondering if I can cash it in? I just don't know if that's an option. Aviva are sending me a pack with info but that may take a couple of weeks to arrive.
As it's a small pension the cash value would be more beneficial to me as the pension wouldn't provide a substantial monthly income. I'd like to buy another property and have the extra cash to use for other things.
I'm a full-time landlord but some years ago I used to work for a large private company that had a non contributory pension scheme. I'll be 55 within the next 6 months and have received a letter from Aviva that the value of my plan is around £20k. I realise that no-one can give me specific advice but I am wondering if I can cash it in? I just don't know if that's an option. Aviva are sending me a pack with info but that may take a couple of weeks to arrive.
As it's a small pension the cash value would be more beneficial to me as the pension wouldn't provide a substantial monthly income. I'd like to buy another property and have the extra cash to use for other things.
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Comments
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it will depend on the terms of the scheme. If you can take the lot you would be taxed on 75% of itI’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
Thanks for that. I'll have to check as all the pension stuff is new to me.0
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As it's a small pension the cash value would be more beneficial to me as the pension wouldn't provide a substantial monthly income. I'd like to buy another property and have the extra cash to use for other things.
On behalf of taxpayers, I thank you for your contribution to the treasury.
However, may it better if you added to the pension. Pensions, whilst invested, are free of income tax and capital gains tax and not included in your estate for IHT. Can the same be said of your properties?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 -
Thanks Mally! I can cash it in. Looking forward to buying my next property.0
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Did you read post 2? If you are a basic rate taxpayer, you can receive 25% tax free. The remaining £15K will be taxed at 20%, so that's £3K gone already. If you are a higher rate taxpayer, as you may well be with this added to your income in the relevant tax year, then you will be taxed at 40%, so £6K tax.
You are not going to be buying another property with the remaining £14K...No free lunch, and no free laptop
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I will - that takes care of the main expense - the deposit. I recently bought a property with roughly the same amount. A limited company is a great tax vehicle.0
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Too bad your limited company isnt paying into a pension for you?
That is a great tax idea. AS a business expense it is fully deductible as an expense.0 -
I'm so happy that you're so happy for me! (grins!)0
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