Small pension pots

borntobemild

Hi - I'm about to turn 65 and have 3 small pension pots I want to take out, which is straightforward.

However - I've already cashed in my tiny Nest pension, and I have a feeling I've cashed another one in a while back.  If so I didn't keep the paperwork, probably assuming that a year or two down the line it was irrelevant. (Two of my work place switched pension providers a few times.)

As I understand it, I can withdraw the money another way which means they'll tax it at emergency rate.

Will HMRC sort this out eventually, or will I have to do it?  What happens if I withdraw two now as small pension plots and it turns out I've already done that twice?

My tax code is very straightforward, the normal allowance but I've given part of it to my husband.  My income is tiny, around £1k annually from yet another pension.

dunstonh

As I understand it, I can withdraw the money another way which means they'll tax it at emergency rate.

Whether you use the small pots rule or UFPLS, the tax handling is the same.

Will HMRC sort this out eventually, or will I have to do it? 

Eventually yes (several years normally)
potential for it to get missed - yes

What happens if I withdraw two now as small pension plots and it turns out I've already done that twice?

You get told off by HMRC and they may ask you to complete tax returns whilst the investigate you.
As the tax is the same between UFPLS and small pots and if you are nowhere near the lifetime allowance, then dont risk it.

Marcon

borntobemild said:

Hi - I'm about to turn 65 and have 3 small pension pots I want to take out, which is straightforward.

However - I've already cashed in my tiny Nest pension, and I have a feeling I've cashed another one in a while back.  If so I didn't keep the paperwork, probably assuming that a year or two down the line it was irrelevant. (Two of my work place switched pension providers a few times.)

As I understand it, I can withdraw the money another way which means they'll tax it at emergency rate.

Will HMRC sort this out eventually, or will I have to do it?  What happens if I withdraw two now as small pension plots and it turns out I've already done that twice?

My tax code is very straightforward, the normal allowance but I've given part of it to my husband.  My income is tiny, around £1k annually from yet another pension.

You can withdraw any number of small pots, but only 3 personal pensions can be encashed under the small pots regime - a regime which only matters if (a) you don't want to trigger the MPAA and (b) you have reached the Lifetime Allowance.