We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
59 - thinking of taking pension - 100k pot - tax etc
Notebook
Posts: 297 Forumite
Hi
If I buy an annuity with the cash, it that taxed? Is the money added to my total income, I earn around 37k.
Thanks
If I buy an annuity with the cash, it that taxed? Is the money added to my total income, I earn around 37k.
Thanks
0
Comments
-
If I buy an annuity with the cash, it that taxed?You would be an annuity with 75% of the pension. 25% would be paid to you as a lump sum tax free. The annuity income is paid via PAYE and subject to income tax at your appropriate rate.Is the money added to my total income, I earn around 37k.Yes.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.2 -
or I could just take the 25% and leave the rest invested - correct?dunstonh said:If I buy an annuity with the cash, it that taxed?You would be an annuity with 75% of the pension. 25% would be paid to you as a lump sum tax free. The annuity income is paid via PAYE and subject to income tax at your appropriate rate.Is the money added to my total income, I earn around 37k.Yes.
Thanks0 -
The usual basic choices areNotebook said:
or I could just take the 25% and leave the rest invested - correct?dunstonh said:If I buy an annuity with the cash, it that taxed?You would be an annuity with 75% of the pension. 25% would be paid to you as a lump sum tax free. The annuity income is paid via PAYE and subject to income tax at your appropriate rate.Is the money added to my total income, I earn around 37k.Yes.
Thanks
1) Take it all out as one lump sum ( usually not recommended )
2) take 25% tax free and buy an annuity with rest
3) take 25% tax free and keep the rest invested and withdraw regularly from it.
4) take a mixture of tax free and taxable cash on a regular basis
If you look at your pension providers website, normally all withdrawal options are explained . Also here.
Taking your pension | Help with taking your pension | MoneyHelper
A discussion with Pensionwise is probably a good idea.0 -
Only if your scheme offers that facility (known as 'drawdown') - and almost all modern contracts do. Check with your provider.Notebook said:
or I could just take the 25% and leave the rest invested - correct?dunstonh said:If I buy an annuity with the cash, it that taxed?You would be an annuity with 75% of the pension. 25% would be paid to you as a lump sum tax free. The annuity income is paid via PAYE and subject to income tax at your appropriate rate.Is the money added to my total income, I earn around 37k.Yes.
ThanksGoogling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!0
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 353.5K Banking & Borrowing
- 254.1K Reduce Debt & Boost Income
- 455K Spending & Discounts
- 246.6K Work, Benefits & Business
- 602.9K Mortgages, Homes & Bills
- 178.1K Life & Family
- 260.6K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards