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Commuting DB lump sum to income
SMcGill
Posts: 295 Forumite
I’m a deferred member of the USS pension and I was reading about the option to commute the ‘standard’ tax free lump sum into higher income payments, but I couldn’t find information on whether the additional income would remain tax free or if I would pay tax on it.
If it’s taxed, then would that mean no tax free element to the pension at all?
If it’s taxed, then would that mean no tax free element to the pension at all?
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Comments
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It would be taxed as it is normal pension income.0
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So, if I want to take a tax free lump sum I’m better off taking it from this DB pension rather than a DC pension as that way I’d still have 25% tax free on DC withdrawals? The commutation rate the USS give as an example is £17 per £1 when commuted from lump sum to income0
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