State Pension and Private Pension

KBandWFB29

Please see below, I am basically after the answer as to whether income tax can be avoided and you can choose how much per year you can take from a private pension pot after withdrawing the 25% tax free amount, is it possible to choose the amount without having an annuity please?

Example

Private pension pot of £80k

Retire at state pension age & take 25% (£20k) tax free from my pension pot leaving the remaining £60k in the pot, persons only income is their state pension of £203.85 per week (£10,600 per yr), the current tax free allowance per week is £241.73 (£12,570 per yr)

Question,

Can you choose to withdraw a chosen amount each following year from the remaining money in the pension pot to avoid paying income tax, i.e. £1,970 at todays current tax allowance?

HappyHarry

KBandWFB29 said:

Please see below, I am basically after the answer as to whether income tax can be avoided and you can choose how much per year you can take from a private pension pot after withdrawing the 25% tax free amount, is it possible to choose the amount without having an annuity please?

Example

Private pension pot of £80k

Retire at state pension age & take 25% (£20k) tax free from my pension pot leaving the remaining £60k in the pot, persons only income is their state pension of £203.85 per week (£10,600 per yr), the current tax free allowance per week is £241.73 (£12,570 per yr)

Question,

Can you choose to withdraw a chosen amount each following year from the remaining money in the pension pot to avoid paying income tax, i.e. £1,970 at todays current tax allowance?

Yes - providing you have a modern pension which allows drawdown.

Whether or not taking all the tax free cash at state pension age is a good idea is another question.

molerat

Or  forgo the tax free lump sum and take £2626 each year, 25% tax free.