Pension, Limp sum and Annual Allowance

I am due to receive a pension from my DB scheme in the next few months. I can take part of this as a tax free lump sum. I also have a DC scheme that I plan to continue to contribute into for a number of years. Will taking the lump sum from the DB scheme reduce my annual allowace down from £40k to £4k (or £60k to £6k when the new rules come in).

Replies

  • LintonLinton Forumite
    16K Posts
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    Forumite
    I am due to receive a pension from my DB scheme in the next few months. I can take part of this as a tax free lump sum. I also have a DC scheme that I plan to continue to contribute into for a number of years. Will taking the lump sum from the DB scheme reduce my annual allowace down from £40k to £4k (or £60k to £6k when the new rules come in).
    No - the Annual Allowance is only reduced if you take taxable money from a DC pension.  Neither taking a tax free lump sum nor  taking your DB pension affect it.
  • xylophonexylophone Forumite
    41.5K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Forumite
    Pension, Limp sum and Annual Allowance

    Needs a blue tablet? :)

Sign In or Register to comment.
Latest MSE News and Guides

Did you know there's an MSE app?

It's free & available on iOS & Android

MSE App

Regifting: good idea or not?

Add your two cents to the discussion

MSE Forum

Energy Price Guarantee calculator

How much you'll likely pay from April

MSE Tools