Living off savings from pension drawdown

graemefullard

Hi there,
I was recently made redundant and had no option but to take my pension early as where I was working if you leave the employer after age 55 you automatically receive your pension whether you want it or not. I have since started working again and have started putting contributions from my salary into my new pension fund @ 25% of my earnings on which I then claim back the income tax payed. My question is, can I invest 100% of my salary and claim the 20% income tax back and live of my savings which at present only makes 2% interest.

Thanks

Graeme

QrizB

I think we need a bit more info.

- You're already receiving an occupational pension. Can you give some more details? Is it a defined benefit (final salary) pension or a defined contribution one?

- In round numbers, how much are you earning in your new job?

Albermarle

and have started putting contributions from my salary into my new pension fund @ 25% of my earnings on which I then claim back the income tax payed. 

Can you also clarify this. Contributions to a pension can be paid by 3 different methods ( it depends on what your employer prefers to do )
1) Salary sacrifice - your salary is reduced and your employer makes the contribution on your behalf
2) Net Pay - the contributions are taken out of your gross salary , before any tax is paid
3) Relief at source - your contributions come out of your taxed pay and the provider adds on tax relief .

In all cases there is no need to claim anything, it all happens automatically. So not sure what you mean when you say you clain the tax back

In fact  the tax relief you are entitled to and the actual tax you pay are not directly related.

xylophone

You're already receiving an occupational pension. Can you give some more details? Is it a defined benefit (final salary) pension or a defined contribution one?

Suspect DB LGPS ( as I understand it, if an employee is made redundant on the grounds of  business efficiency after age 55, immediate payment of the pension is mandatory).