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Question about Crystallisation and Future Pensions contributions
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Lismac
Posts: 20 Forumite

I have 3 different pension pots - 2 that are dormant and 1 that I am currently paying into via salary sacrifice.
If I were to take out 25% of the 2 pension pots that are currently dormant, could I continue to contribute the maximum £60K a year into my current work pension pot?
If I were to take out 25% of the 2 pension pots that are currently dormant, could I continue to contribute the maximum £60K a year into my current work pension pot?
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Comments
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As long as you only take the tax-free amounts.If you take even 1p of the taxable 75% you trigger the MPAA1
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Thank you LHW990
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Be careful Lismac. I have known many fall foul of this, thinking that "surely the rule can't be as black and white as that?". Alas, it is. As LHW said, any withdrawal whatsoever from your 75% in any of your pots triggers the MPAA and a maximum thereon in of 10k per year in contributions. It's a ridiculously harsh rule but that's what it is.0
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MetaPhysical said:Be careful Lismac. I have known many fall foul of this, thinking that "surely the rule can't be as black and white as that?". Alas, it is. As LHW said, any withdrawal whatsoever from your 75% in any of your pots triggers the MPAA and a maximum thereon in of 10k per year in contributions. It's a ridiculously harsh rule but that's what it is.
This doesn’t invoke the MPAA.2 -
Lismac said:I have 3 different pension pots - 2 that are dormant and 1 that I am currently paying into via salary sacrifice.
If I were to take out 25% of the 2 pension pots that are currently dormant, could I continue to contribute the maximum £60K a year into my current work pension pot?0 -
Albermarle said:Lismac said:I have 3 different pension pots - 2 that are dormant and 1 that I am currently paying into via salary sacrifice.
If I were to take out 25% of the 2 pension pots that are currently dormant, could I continue to contribute the maximum £60K a year into my current work pension pot?0 -
FIREDreamer said:MetaPhysical said:Be careful Lismac. I have known many fall foul of this, thinking that "surely the rule can't be as black and white as that?". Alas, it is. As LHW said, any withdrawal whatsoever from your 75% in any of your pots triggers the MPAA and a maximum thereon in of 10k per year in contributions. It's a ridiculously harsh rule but that's what it is.
This doesn’t invoke the MPAA.FIREDreamer said:MetaPhysical said:Be careful Lismac. I have known many fall foul of this, thinking that "surely the rule can't be as black and white as that?". Alas, it is. As LHW said, any withdrawal whatsoever from your 75% in any of your pots triggers the MPAA and a maximum thereon in of 10k per year in contributions. It's a ridiculously harsh rule but that's what it is.
This doesn’t invoke the MPAA.0 -
You can combine and split pots to get to exactly £10k each. Hargreaves Lansdown has the convenience feature of doing it behind the scenes.
When it comes to the 25% the actual rule is up to 25%. Take less and you can't take the rest later. The correct way to do it is to take 25% of a sufficient portion of the pot to meet your objective and leave part uncrystallised, 75% of another part in flexi-access drawdown and the 25% of that in your bank account.1 -
FIREDreamer said:
This doesn’t invoke the MPAA.0 -
I think you need to tell your pension provider you are withdrawing under the small pots rule - and not all of them support it.I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards 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.1
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