We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide

Tax Free Cash

zorsey
zorsey Posts: 2 Newbie
in Pensions, annuities & retirement planning
I know that I am allowed 25% tax free cash from my pensions but currently they are held in 2 different places. I have a RL personal pension (150K)with a 9% guaranteed annuity and a SIPP (290K) I plan on buying an annuity with the 150K but and I presume that I therefore lose the £37K tax free cash and I cannot carry this across to my other pension pot and look at my pension holdings in total? Ir tax free cash on £440K?? So £110K instead of £73k

Comments

  • Marcon
    Marcon Posts: 15,916 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Combo Breaker
    Each pension is assessed individually, so sadly no, you can't 'carry across' the tax free 25% from one to another.
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • zorsey
    zorsey Posts: 2 Newbie
    Thought that would be the case !!!55357;!!!56900;thks for replying
  • westv
    westv Posts: 6,606 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Why would you lose the £37k?
  • Paul_Herring
    Paul_Herring Posts: 7,484 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    westv wrote: »
    Why would you lose the £37k?

    They mean the ability to withdraw it tax free.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • dunstonh
    dunstonh Posts: 121,282 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Marcon wrote: »
    Each pension is assessed individually, so sadly no, you can't 'carry across' the tax free 25% from one to another.

    <pedentic mode on>
    Actually, the rules do allow it.
    <pedantic mode off>

    However, you don't see it supported anywhere apart from the odd AVC linked to a main scheme.
    I presume that I therefore lose the £37K tax free cash
    You can still get the TFC on most of their plans. Its only on section 32 buy out bonds where you may see an issue.
    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.
  • Marcon
    Marcon Posts: 15,916 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Combo Breaker
    dunstonh wrote: »
    <pedentic mode on>
    Actually, the rules do allow it.
    <pedantic mode off>

    However, you don't see it supported anywhere apart from the odd AVC linked to a main scheme.

    Thank you - didn't know that. Please could you say some more, in particular what 'supported' means?
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • dunstonh
    dunstonh Posts: 121,282 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Marcon wrote: »
    Thank you - didn't know that. Please could you say some more, in particular what 'supported' means?

    Basically, the rules do allow for the combining of plans, on paper, and the TFC being paid from just one of them. However, no provider supports that functionality. I am guessing a mixture of administration costs and implementation costs vs the very small number of people that would use it has put them off. So, it isnt the pension rules that are preventing this. It is the commercial reality.

    Whereas linking of AVCs with the main scheme is actually quite easy to do as the administration is normally all with the same administrator. So, you do see it with some workplace schemes.
    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.
  • westv
    westv Posts: 6,606 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Paul_Herring wrote: »
    They mean the ability to withdraw it tax free.


    The OP doesn't mention the GAR excludes the ability to take 25% tax free but I'll assume now they can't as otherwise there'd be no need to ask their question.
  • atush
    atush Posts: 18,731 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    What would you do witht he 37K if you can get it as a TFLS before the gAR being applied to the rest?

    If you are thinking keping it in cash, you'd probably be better off using it to buy the GAR
  • Linton
    Linton Posts: 18,545 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    westv wrote: »
    The OP doesn't mention the GAR excludes the ability to take 25% tax free but I'll assume now they can't as otherwise there'd be no need to ask their question.


    Th GAR wont exclude taking the TFLS but it would probably be financially foolish to take the cash rather than a 9% annuity.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 354.3K Banking & Borrowing
  • 254.4K Reduce Debt & Boost Income
  • 455.4K Spending & Discounts
  • 247.3K Work, Benefits & Business
  • 604K Mortgages, Homes & Bills
  • 178.4K Life & Family
  • 261.5K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 37.7K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.
Update Your Picture