Hargreaves Lansdown cash SIPP question

sparkiemalarkie

Hi I have just asked HL for the drawdown application forms for my £3600. (£2880 + £720)
I will take the 25% tax free but was wondering if I can take the full £2700 remaining cash in one lump sum.
I have a tax code of 270 for HL and, in the past 3 years of doing this I have been taking the cash in equal monthly installments.
It has just occurred to me that if I take the full amount I could have earn a bit of interest on the £2700
any thoughts would be most welcome.
many thanks

Dazed_and_C0nfused

I think the whole point is that you can generally take the money as when you want (from a DC scheme).

But if you take it before month 12 of the tax year don't be surprised if HL deduct some tax.  The earlier in the year the more tax.  That is because tax code 270(T?) allows HL to pay £2,709 without deducting tax by month 12 of the tax year.

Would be different if they change you to an annual payment basis for tax purposes but I suspect that isn't something HL do as a matter of course as they seem to be monthly payers from other posters on here.

drumtochty

HL have no choice, they have to work out how much tax free allowance you have at that time of the year, pay that without deducting tax and tax the person according to the persons tax code. Depending on the tax code they have reciced from HMRC for the person.

There is no "seems to be monthly" at all. HL have no choice but to follow the HMRC deduction rules to the letter. The person can then fill in the pension tax rebate certificate after they receive their pay slip from HL. The tax rebate form is considered by HMRC and in most cases the tax refund if one is due is usually paid within 4 to 6 weeks.

Dazed_and_C0nfused

They could operate their payroll weekly, fortnightly, 4 weekly, monthly, quarterly, half yearly or annually if they want, that is their choice not HMRC's

All I mean is that they seem to have opted for monthly payments so the tax would be based on the allowances due at the month they make the payment.

I'm not aware of rules which would prevent them from making payments at other frequencies if they so wished.