Defering my state pension

Britvick

Albermarle said:

Britvick said:

I will pay tax either way as I will have a private pension when I am no longer working. Maybe I could make the private pension last longer by only drawing when I need it? and possibly pay less tax by doing so?

If it is a normal DC pension pot, you do not have to take it all if you do not, and leave it as an inheritance. Or you can take the 25 tax free lump sum and leave the rest . Or take it a few years later.

I really thank you for your answer, but it is a bit above my head? I don't know what DC is, or understand the rest? Sorry and thank you.

bowlhead99

Britvick said:

Albermarle said:

Britvick said:

I will pay tax either way as I will have a private pension when I am no longer working. Maybe I could make the private pension last longer by only drawing when I need it? and possibly pay less tax by doing so?

If it is a normal DC pension pot, you do not have to take it all if you do not, and leave it as an inheritance. Or you can take the 25 tax free lump sum and leave the rest . Or take it a few years later.

I really thank you for your answer, but it is a bit above my head? I don't know what DC is, or understand the rest? Sorry and thank you.

DC means 'defined contribution', as distinct from 'defined benefit' DB. In other words the money or benefit you can get out of it in retirement is not defined up front (e.g. x% of your final salary for every year's service to an employer), but simply relates to the amount of contributions that were put into it and how they have grown with the investment markets.

If it is a 'normal' DC pot of money from a workplace or private pension scheme, and the benefits are not fixed or guaranteed up front (you simply get annual estimates of what it might be worth) you are not forced to take it all at once or buy an annuity to get a specific amount per year; you can instead draw it out flexibly - taking the standard 25% tax free lump sum up front, or as you go along.

The particular private pension scheme you're in may not support 'flexible drawdown' and the taking of ad-hoc amounts whenever you feel you need it, but you can transfer to one that does. 

That goes for 'normal DC pension pots'. If you instead had a defined benefit pension scheme with protected benefits (e.g. final salary, guaranteed annuity rate) it would not be simple to give up that arrangement and draw the money flexibly because you would need to take expensive professional advice to be allowed to do it. Generally for a bog-standard worlplace DC scheme or private pension scheme, that's not an issue because the benefits are not fixed or guaranteed, so you would be able to easily move the pot of money to a provider that supported flexible access if the existing pension provider did not.

Albermarle

Probably some background reading could be fruitful
https://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics
https://www.moneysavingexpert.com/savings/discount-pensions/
You need to be clear what type of pension your 'private pension ' is .
If it is defined contribution pension you may benefit from a free interview with Pensionwise
https://www.pensionwise.gov.uk/en