Can you claim one pension and keep working?

IAMIAM

Hi,
If someone was to claim a pension at 55 from an old employer but then continue working until 65/68 with another employer.
Is the first pension subject to tax and NI? Can you continue paying into your second pension as normal?
Also, how can you transfer a pension without incurring mega fees by paying a Financial Advisor thousands for the privilege. 
Thanks,

Alter_ego

Yes you can draw a pension and keep working. Pensions are subject to income tax but not NI, you can continue to contribute to another. On the last Q perhaps marry an IFA
You can also draw state pension and continue working, when the time comes

Dazed_and_C0nfused

If the pension you start taking money from is a defined contribution scheme then it may limit your future contributions.

You need to read up on the Money Purchase Annual Allowance (MPAA).

Marcon

Dazed_and_C0nfused said:

If the pension you start taking money from is a defined contribution scheme then it may limit your future contributions.

Only if you 'flexibly access' the benefits and the pot is valued at £10,000+. 

Won't impact on OP, since they are currently in a DB scheme (the TPS).

barnstar2077

IAMIAM said:

Hi,
If someone was to claim a pension at 55 from an old employer but then continue working until 65/68 with another employer.
Is the first pension subject to tax and NI? Can you continue paying into your second pension as normal?
Also, how can you transfer a pension without incurring mega fees by paying a Financial Advisor thousands for the privilege. 
Thanks,

I don't know which you have, but mega fees only applies to DB pensions, not DC ones.

IAMIAM

I have a small old company DB one - valued £100k
I have TPS one, I also have an Alpha one.

Marcon

IAMIAM said:

I have a small old company DB one - valued £100k
I have TPS one, I also have an Alpha one.

Expect to pay £5,000+ for advice on the old company one.

IAMIAM

Exactly my point! 

galaxygal

Hello all
I'm new to the forums:  Hope you don't mind my piggy-backing a related situation / question to this thread! 
I have an old NHS pension due to provide me with a lump sum of appx £16k next October, when I reach 60.  Thereafter, I'll receive about £5k per year.
I will continue to work for our family business. I usually draw a salary at the tax free threshold, appx £12,750  in the relevant 22-23 tax year.
I have been given contradictory advice and would appreciate clarification, please:
In the 22-23 tax year when I receive the £16k lump sum, will I be taxed on ALL my salary, or will I still have the full personal tax allowance on the salary in that tax year?
I understand that the annual £5k pension in subsequent tax years will affect my personal tax free allowance (so I will take less salary in future years, as I wind down anyway.)
I also have dividends (inc the current £2k tax free pa) and director's loans to pull out of the business as income for the next few years. 
Thank you for considering my question.

Marcon

galaxygal said:

Hello all
I'm new to the forums:  Hope you don't mind my piggy-backing a related situation / question to this thread! 
I have an old NHS pension due to provide me with a lump sum of appx £16k next October, when I reach 60.  Thereafter, I'll receive about £5k per year.
I will continue to work for our family business. I usually draw a salary at the tax free threshold, appx £12,750  in the relevant 22-23 tax year.
I have been given contradictory advice and would appreciate clarification, please:
In the 22-23 tax year when I receive the £16k lump sum, will I be taxed on ALL my salary, or will I still have the full personal tax allowance on the salary in that tax year?
I understand that the annual £5k pension in subsequent tax years will affect my personal tax free allowance (so I will take less salary in future years, as I wind down anyway.)
I also have dividends (inc the current £2k tax free pa) and director's loans to pull out of the business as income for the next few years. 
Thank you for considering my question.

Usually better to start a new thread - otherwise people might overlook your question.

The £16K is a tax free lump sum and won't impact on your personal allowance. If you are receiving some NHS pension in the tax year you retire and that pension + salary takes you over the personal allowance, then you'll pay tax on the amount by which you exceed the personal allowance.

Dazed_and_C0nfused

In the 22-23 tax year when I receive the £16k lump sum, will I be taxed on ALL my salary, or will I still have the full personal tax allowance on the salary in that tax year?

I understand that the annual £5k pension in subsequent tax years 

Don't forget you will probably have some pension in the same tax year as the lump sum.

Might be different if the lump sum is paid very late in the tax year but there may be some to consider in that year.