Taking pension pot advice

ltwigg260

My husband has just tracked down an old pension not been contributed to for many years. The fund value is approx £23000.
He is approaching 63. Unfortunately he has a life limiting illness which means he is unlikely to live until retirement age or certainly not long after. We are aware that he can take 25% tax free. We need advice on the best option for the rest. Obviously he wants to take as much as possible, as soon as possible but has a total aversion to paying any tax!! He has absolutely no income at present and I claim his tax allowance.

Dazed_and_confused

Obviously he wants to take as much as possible, as soon as possible but has a total aversion to paying any tax!! He has absolutely no income at present and I claim his tax allowance.

You cannot "claim his tax allowance". He can give you 10% of his Personal Allowance. Which leaves him with £11,250 in the current tax year.

If he literally doesn't ever want to pay any tax then he can take a maximum of £1042 to start with (from the taxable element). If he took more than that to start with some tax would be deducted and he'd either have to claim it back or wait for HMRC to automatically refund it.

If he doesn't mind paying tax and then getting it back he could take £11,250 (from the taxable element) and although a lot of tax would be taken to start with he'd get it all back eventually.

Assuming he genuinely does have absolutely no other taxable income in the current tax year.

He could do the same again, possibly more if the Personal Allowance increases next tax year, on 6 April 2020 (subject to any new income he may receive in the 2020:21 tax year)

xylophone

He might consider a transfer to a SIPP and leave in cash.

He could take the 25% PCLS immediately and withdraw the balance as a regular monthly income over the next eighteen months or so as best meets his tax position?

Example

https://www.hl.co.uk/pensions/sipp/apply-now

squirrelpie

What type of pension is it? What do its rules say are allowed in your circumstances? Do you want the money to spend or just to save? If the latter it might be sensible to leave it in the pension, although perhaps not with the particular provider it is with now, whoever that is.