Pension, Limp sum and Annual Allowance

Chris_B1981

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).

Linton

Chris_B1981 said:

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

Pension, Limp sum and Annual Allowance

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