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pension question

aayush
Posts: 1,295 Forumite


I have 2 private pensions both frozen
Have taken tax fee amounted at 55
What amount can I take from what is left without paying any tax on even though still have years before pension date
Have taken tax fee amounted at 55
What amount can I take from what is left without paying any tax on even though still have years before pension date
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Comments
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I think you can take money out but it is considered as income and hence would be taxable unless your other income is less than the personal allowance1
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aayush said:I have 2 private pensions both frozen
Have taken tax fee amounted at 55
What amount can I take from what is left without paying any tax on even though still have years before pension date1 -
Think the link info below will be helpful, essentially £12,570 is personal Income Tax allowance, so income up to that figure probably tax free.
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https://www.gov.uk/income-tax-rates
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am 59 years old earn at present 24 thus need to ask if can use the pension to use as deposit on unit for my self0
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aayush said:am 59 years old earn at present 24 thus need to ask if can use the pension to use as deposit on unit for my selfI’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe and Old Style Money Saving boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
"Never retract, never explain, never apologise; get things done and let them howl.” Nellie McClung1 -
And you also need to think about what you're going to live on when you stop working if you no longer have any pension left.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe and Old Style Money Saving boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
"Never retract, never explain, never apologise; get things done and let them howl.” Nellie McClung2 -
Brie said:aayush said:am 59 years old earn at present 24 thus need to ask if can use the pension to use as deposit on unit for my self0
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As you are already a taxpayer any income from those pensions will be taxed.0
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If you have already taken the whole of the 25% tax free element then any further withdrawals are subject to tax. If you are already paying tax on other income then at least 20% tax will be due on any pension payments, how much tax will actually be deducted at source is a whole different story and you may be owed a refund or face a tax bill. Also taking a taxable withdrawal will trigger the MPAA and limit you to paying no more than £10K pa gross into a money purchase pension in future.
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aayush said:Brie said:aayush said:am 59 years old earn at present 24 thus need to ask if can use the pension to use as deposit on unit for my self
If you are earning £24k a year presently and then you take £20k out of a pension you will be taxed at the lower rate on £44k less the yearly allowance. So taxed on £31,430.
If you are earning £24k a year presently and then you take £50k out of a pension you will be taxed (I believe) at the lower rate on £50270 less the yearly allowance. So taxed on £33,700 at the lower rate. And taxed at 40% on the other £23,730.
That's why you might want to take the money out over 2 or 3 tax years so you stay in the lower tax band. Be careful about doing so as this might change the amount you can put into any current employment scheme tax free.
I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe and Old Style Money Saving boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
"Never retract, never explain, never apologise; get things done and let them howl.” Nellie McClung0
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