Taking full pension pot at 55

stevericks

marlot said:

Assuming that all thee pensions are defined contribution (ie. pots of money rather than defined benefit), you might be better crystallising all three, taking ONLY the 25% tax free from each.  

If I crystallise all 3 then I’m presuming that I don’t have a pension to pay into any more. Thought I would still continue to pay into my current one. Or is that wrong?

Costabit

stevericks said:

I’m getting the impression that you all think it’s a bad idea. I think the first thing I need to do is go and see a financial adviser. Thanks for all your answers, think I defined to rethink.

It seems that you have realised that it may not be the best course of action in taking £100K from your pension in one go.
Should you need further reassurance and decide to pay for advice , then maybe go for an IFA ( independent )as opposed to a tied FA. 

mark55man

hey @stevericks thanks for coming back.  it can be tough to hear advice that goes against what you want to do, but I've hung around these forums for a long time, and you have had the A Team on your case.  The  key themes
* try not to unnecessarily incur tax you don't have to - unless there is an exceptional pressing reason for it
* the moment you take a penny of money from you DC pensions that is not tax free you trigger the MPAA which can restruct your donations later
* It's not wrong to use your pensions as a vehicle to help mortgage payments, but typically that involves building a pot (especially if taking advantage of HRT tax relief and employer contributions) and then drawing out at basic rate tax.  People (by which I mean me) call this mortgage neutral.  I'm not typical in that if I had been more organised and savvy earlier in my life I would already be mortgage free

jamesd

stevericks said

If I crystallise all 3 then I’m presuming that I don’t have a pension to pay into any more. Thought I would still continue to pay into my current one.

You could transfer most of the money out of the current one into one of the others and continue using it or open a new one.

cfw1994

stevericks said:

marlot said:

Assuming that all thee pensions are defined contribution (ie. pots of money rather than defined benefit), you might be better crystallising all three, taking ONLY the 25% tax free from each.  

If I crystallise all 3 then I’m presuming that I don’t have a pension to pay into any more. Thought I would still continue to pay into my current one. Or is that wrong?

When you crystallise a pension to take 25% of it as TFLS (tax free lump sum), then the 75% goes into drawdown.  
If you are still paying into one of the schemes, you can carry on doing so: the pension will know what is in drawdown, and what is 'new money'.   My main work has most now in drawdown (due to me crystallising various chunks), but I am still paying some in.
As mark55man says, once you touch a penny of the drawdown amount (the 75% that went to drawdown), then from that point, you will have triggered the MPAA, & can then only put up to £4k into any pension scheme per year.

stevericks

thanks for all the comments. I think I know what questions to ask a financial advisor and I’m pretty sure I know not to take the whole pot.

mark55man

ok my bad - but I read it on here - so will go and have a look.  sorry OP for the potential error

EDITED TO ADD - From The Pension Advisory Service -
"The reduced amount is known as the 'money purchase annual allowance' (MPAA) and includes both your own contribution and any other contribution paid on your behalf, such as an employer or a third party."

EDITED TO ADD - Now deleted post that was wrong.  although the text is preserved in @zagfiles response (thank you).  I think educationally better to leave it - I don't mind its embarrassing to be so wrong but a lesson and its clear from zagfiles what the position is

@Mallygirl thank you - if you feel it best - I'm happy for the thread from zagfiles response to my now deleted pot just goes, but as above I'm happy for it to be left - your call

MallyGirl

You can delete the incorrect posts so it doesn't stick in anyone's mind for the future - or I can do it for you if you want

jamesd

mark55man said:

ok my bad - 

You make mistakes, I make mistakes, we're just human. Thanking the person who pointed out the mistake and recanting is the best fix I've come up with.

Instead of deleting I tend to edit the post to strike through the wrong text. That makes the recanting clear and leaves the content intact. Personal taste, though.

zagfles

mark55man said:

ok my bad - but I read it on here - so will go and have a look.  sorry OP for the potential error

EDITED TO ADD - From The Pension Advisory Service -
"The reduced amount is known as the 'money purchase annual allowance' (MPAA) and includes both your own contribution and any other contribution paid on your behalf, such as an employer or a third party."

EDITED TO ADD - Now deleted post that was wrong.  although the text is preserved in @zagfiles response (thank you).  I think educationally better to leave it - I don't mind its embarrassing to be so wrong but a lesson and its clear from zagfiles what the position is

@Mallygirl thank you - if you feel it best - I'm happy for the thread from zagfiles response to my now deleted pot just goes, but as above I'm happy for it to be left - your call

I've deleted mine too as original post deleted and correct info now posted above. Didn't intend to embarass, just to identify it as incorrect before anyone acted on it