Pension drawn down

LouisT_45

Hi,
I am able to take out 25% of my private pension net month and can apply 15 days short of my next birthday (55).

I have spoken to my provider and need to do a phone interview.

Can I get my 25% in one lump sum?

I have the documents but remain confused- not hard for me!!

Tanks so much

AnotherJoe

Yes you can get it in one lump sum.
Do you have an immediately need for it ? I ask because some posters here seem to get ££ in front of their eyes and want to grab it and stash it in bank account just because they can.

LouisT_45

thank you so much Sir

I want 25% of £36,000 for school fees

Its is just that I read somewhere that the 25% may not be paid in one lump sum.

My Pension is Reassaure-formerly Marks and Spencer

dunstonh

Can I get my 25% in one lump sum?

If you want. Your pension may not be able to do it (most legacy plans cant) but you can transfer it to one that can if required.

Its is just that I read somewhere that the 25% may not be paid in one lump sum.

You can take it all up front. Or you can take some up front or you can take it on drip (the latter being the most common in our advised cases).

LouisT_45

What do I need to ask for when I speak to my provider would it be worth taking all the pot £36,000 in one go to inflation proof the school fees?

Obviously I would be hit for tax on the other 75%

I am not great on money and the feedback is rather excellent free advice

AnotherJoe

LouisT_45 wrote: »

What do I need to ask for when I speak to my provider would it be worth taking all the pot £36,000 in one go to inflation proof the school fees?

They would suggest you fill your forms in with crayon, since obviously you wont be allowed to have sharp pencils and pens where you must be staying.

Obviously I would be hit for tax on the other 75%

I am not great on money and the feedback is rather excellent free advice

Inflation is say 3%.
You'd lose somewhere between 20% to 40% in tax if you took the rest all in one go.

Its hard to imagine just how spectacularly bad at "not being great on money" someone could possibly be to think it was better to pay 20% plus than 3%.

Add to that, are you still working? If so, if you take even 1p of that 75% you'll never be able to put more than £4k a year into a pension afterwards

xylophone

to inflation proof the school fees?

Can you explain how taking the balance of your pension would do this?

Will your Reassure plan permit drawdown or will you need to transfer out?

What fee period is the £9000 meant to cover?

Be aware that the £27000 remaining will be taxed as income in the tax year that you draw it.

If taking it in one tax year would tip you into a higher tax band you might wish to reconsider .....

LouisT_45

Yes I am

But I have an excellent public sector pension which is index linked

Most NHS workers don't remain what they are onto

Take care. Your response have made me think.

Thanks again

xylophone

Add to that, are you still working? If so, if you take even 1p of that 75% you'll never be able to put more than £4k a year into a pension afterwards

Into a Money Purchase pension.....

https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/defined-benefits-and-the-mpaa/


When does it apply?

The MPAA applies to all Defined Contribution (DC) savings made by that individual after the date it's triggered. If this occurs part-way through a Pension Input Period (PIP) only the contributions made after the trigger are tested against the MPAA. However the total contributions/accrual in that tax year are also tested against the £40,000 AA or TAA.

For the avoidance of doubt, this includes contributions made to any other DC plans the individual has in addition to the one they've taken benefits from.

What about DB?
Accrual under defined benefits (DB) arrangements is not tested against the MPAA, but will be included in the test of total contributions against the AA/TAA:

Audaxer

AnotherJoe wrote: »

They would suggest you fill your forms in with crayon, since obviously you wont be allowed to have sharp pencils and pens where you must be staying.

Its hard to imagine just how spectacularly bad at "not being great on money" someone could possibly be to think it was better to pay 20% plus than 3%.

Go easy on him. It's good that OP is on here admitting "not being great on money" and asking for advice rather than going ahead and making a big mistake, as I'm sure many other people do who are not financially aware and see big ££ signs in front of them.

AnotherJoe

3% or 20%? . I hope they aren't involved with working out dosages.