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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).

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  • Linton
    Linton Posts: 18,125 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    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.
  • xylophone
    xylophone Posts: 45,593 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Pension, Limp sum and Annual Allowance

    Needs a blue tablet? :)

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