Small Pension with Protected Cash free tax.......

parcival

Mrs Parcival has a small and rather old money purchase pot with Aviva (was Friends life). This came from an occupational pension.
It's current value is £23k and they indicate that about £17k can be paid tax free. MrsP is a basic rate taxpayer. Our thinking is to take the whole lot and just pay tax on the £6k portion. Seems obvious to take as much tax free cash as possible but is it worth doing anything else with the remaining 6k.
Worth pointing out that MrsP is well placed with other pensions and private money so it's not money she is relying on for the rest of her life.
Thank you...

Malthusian

She needs to ensure she takes the enhanced tax free cash directly with Aviva as if the policy is transferred, the enhanced tax free cash will usually be lost (except under special circumstances). It should be possible to transfer the remainder of the fund to income drawdown.

Why does she want the money out? The general rule that it is better to leave pension money in the tax-free wrapper until it is actually needed still applies to enhanced tax free cash.