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Pension pot query
meltonred
Posts: 19 Forumite
Morning.
I have an old L&G pension sitting doing nothing from a previous employment.
I'm 55 and can now take a lump sum of £10k , which would come in handy ...
What would be the tax issues if i drew the cash pot ?.
I would have to pay tax on the 10k ?
Any help , advice would be appreciated.
Merry Christmas.
I have an old L&G pension sitting doing nothing from a previous employment.
I'm 55 and can now take a lump sum of £10k , which would come in handy ...
What would be the tax issues if i drew the cash pot ?.
I would have to pay tax on the 10k ?
Any help , advice would be appreciated.
Merry Christmas.
0
Comments
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You will pay tax on 75% of the pot. It will be added to your other income in the tax year so be careful that it doesn’t make you a higher rate tax payer. The other 25% is tax free.
You will also restrict your future pension contributions to £4K per annum.0 -
.your and and your employers pension contributions.You will pay tax on 75% of the pot. It will be added to your other income in the tax year so be careful that it doesn’t make you a higher rate tax payer. The other 25% is tax free.
You will also restrict your future pension contributions to £4K per annum.0 -
You will pay tax on 75% of the pot. It will be added to your other income in the tax year so be careful that it doesn’t make you a higher rate tax payer. The other 25% is tax free.
You will also restrict your future pension contributions to £4K per annum.
Not if taken as a small pot and under £10k. Small pot encashment uses 0% LTA and does not limit future contributions to £4k.
Of course if it is over £10k it cannot be taken as a small pot.0 -
I have an old L&G pension sitting doing nothing from a previous employment.
What do you mean by "doing nothing"?I'm 55 and can now take a lump sum of £10k , which would come in handy ...
Can you afford to take it early and will it make you poorer in retirement?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 -
is that right? once you have taken a cash lump sum from your pension are your future contributions restricted?
See here:
https://www.moneyadviceservice.org.uk/en/articles/money-purchase-annual-allowance0
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