Stupid question alert

Dazed_and_C0nfused

SWB said:

Thanks Albermarle. I am reading and learning more about pensions which is probably a good thing at my age
So, the original question...so far, I have found out that I can ask for the £10k to be paid into the newly opening DC and then drawdown a 2.5k tax free bonus without affecting my first DB pension. Are there any negatives to this please anyone?
Thanks for your help.

Quite a long thread so do you mean you will pay £8k (net) and then take the 25% TFLS, and only the TFLS, from that one pension?

Or will you pay £10k (net) and take less than 25% as a TFLS?

Not really sure what you mean by "bonus"?

noitsnotme

SWB said:

Thanks Albermarle. I am reading and learning more about pensions which is probably a good thing at my age
So, the original question...so far, I have found out that I can ask for the £10k to be paid into the newly opening DC and then drawdown a 2.5k tax free bonus without affecting my first DB pension. Are there any negatives to this please anyone?
Thanks for your help.

Do you actually NEED to take the 25% of the £10k now?  The best option might actually be to have the bonus/sweetener paid in to your pension and then left alone to grow until you actually retire.

SWB

Dazed_and_C0nfused said:

SWB said:

Thanks Albermarle. I am reading and learning more about pensions which is probably a good thing at my age
So, the original question...so far, I have found out that I can ask for the £10k to be paid into the newly opening DC and then drawdown a 2.5k tax free bonus without affecting my first DB pension. Are there any negatives to this please anyone?
Thanks for your help.

Quite a long thread so do you mean you will pay £8k (net) and then take the 25% TFLS, and only the TFLS, from that one pension?

Or will you pay £10k (net) and take less than 25% as a TFLS?

Not really sure what you mean by "bonus"?

My company will pay me a £10k sweetener. I was thinking about putting it into the new DC and taking £2.5k tax free.

SWB

noitsnotme said:

Do you actually NEED to take the 25% of the £10k now?  The best option might actually be to have the bonus/sweetener paid in to your pension and then left alone to grow until you actually retire.

I dont really need it but we could have a couple of nice weekends away this year

Dazed_and_C0nfused

SWB said:

Dazed_and_C0nfused said:

SWB said:

Thanks Albermarle. I am reading and learning more about pensions which is probably a good thing at my age
So, the original question...so far, I have found out that I can ask for the £10k to be paid into the newly opening DC and then drawdown a 2.5k tax free bonus without affecting my first DB pension. Are there any negatives to this please anyone?
Thanks for your help.

Quite a long thread so do you mean you will pay £8k (net) and then take the 25% TFLS, and only the TFLS, from that one pension?

Or will you pay £10k (net) and take less than 25% as a TFLS?

Not really sure what you mean by "bonus"?

My company will pay me a £10k sweetener. I was thinking about putting it into the new DC and taking £2.5k tax free.

If you add £10k you will have £12.5k in the pension with the basic rate tax relief added so 25% TFLS would be £3,125 not £2,500.

SWB

I didnt think of that, thank you very much

noitsnotme

SWB said:

noitsnotme said:

Do you actually NEED to take the 25% of the £10k now?  The best option might actually be to have the bonus/sweetener paid in to your pension and then left alone to grow until you actually retire.

I dont really need it but we could have a couple of nice weekends away this year

But it isn’t really a ‘bonus’.  It is a ‘sweetener’ because you are being moved to an inferior pension scheme.  You’re then thinking about ‘robbing’ your pension further just for a couple of nice weekends.  Future you may not thank present you.  It wasn’t an annual bonus you were expecting so you’re not really losing out by not using some of it now.

LHW99

SWB said:

noitsnotme said:

Do you actually NEED to take the 25% of the £10k now?  The best option might actually be to have the bonus/sweetener paid in to your pension and then left alone to grow until you actually retire.

I dont really need it but we could have a couple of nice weekends away this year

Even with vaccination here, that still may not be a good idea this year