withdrawing my pension pot in a lump sum.

I withdrew 1/4 of my works  pension pot tax free about 3years ago, leaving just below 30k, it is in a low risk investment with Aviva, and pay 1% a month of fund to be managed, the sum is much the same as it was when invested 3 yrs ago, my only income is my state pension, I am thinking about withdrawing the whole lump sum in March and  paying the tax of roughly 6 grand live in Scotland, my state pension and lump sum fall within the lower tax bracket,  i feel the money would be better in my bank account earning a little interest, and be accessible, for emergencies ?

Comments

  • Veteransaver
    Veteransaver Posts: 456 Forumite
    Name Dropper First Post
    I doubt you are being charged 1% a month in fees.
  • dunstonh
    dunstonh Posts: 116,281 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    I withdrew 1/4 of my works  pension pot tax free about 3years ago, leaving just below 30k, it is in a low risk investment with Aviva, and pay 1% a month of fund to be managed
    I doubt it is 1% a month.  1% a year maybe.  Although since auto-enrolment, the maximum charge has been 0.75% on AE compliant schemes.

     i feel the money would be better in my bank account earning a little interest, and be accessible, for emergencies ?
    a) it is already accessible for emergencies.
    b) in the long term, that is unlikely to be the best outcome.  You shouldn't look at short term returns (especially following a negative year).  Unless you have no cash savings at all and need to replenish.





    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.
  • hoppy22
    hoppy22 Posts: 5 Forumite
    First Post
    I doubt you are being charged 1% a month in fees.
    I have a ongoing adviser charge of £22 a month , don't really understand it all.
  • Marcon
    Marcon Posts: 10,594 Forumite
    First Post First Anniversary Name Dropper Combo Breaker
    edited 15 February at 12:45PM
    hoppy22 said:
    I doubt you are being charged 1% a month in fees.
    I have a ongoing adviser charge of £22 a month , don't really understand it all.
    Do you need ongoing advice? If not, why are you paying for it? The fact you've come to this forum to ask a question rather than asking your adviser suggests not...
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • Albermarle
    Albermarle Posts: 21,993 Forumite
    First Anniversary First Post Name Dropper
    hoppy22 said:
    I doubt you are being charged 1% a month in fees.
    I have a ongoing adviser charge of £22 a month , don't really understand it all.
    You must have an ( old?) agreement with a financial advisor to provide ongoing advice ( and charge for it)
  • xylophone
    xylophone Posts: 44,322 Forumite
    Name Dropper First Anniversary First Post
    Is your state pension under £12570 a year?
  • hoppy22
    hoppy22 Posts: 5 Forumite
    First Post
    xylophone said:
    Is your state pension under £12570 a year?
    Yes it is, thanks.
  • hoppy22
    hoppy22 Posts: 5 Forumite
    First Post
    hoppy22 said:
    xylophone said:
    Is your state pension under £12570 a year?
    Yes it is, thanks.
    just got a letter about April state pension increase, i am going up to £12,658. per year, this is my only income, is this amount now taxable ?
  • hoppy22 said:
    hoppy22 said:
    xylophone said:
    Is your state pension under £12570 a year?
    Yes it is, thanks.
    just got a letter about April state pension increase, i am going up to £12,658. per year, this is my only income, is this amount now taxable ?
    It has always been taxable, certainly in my lifetime.

    If you have absolutely no other income in the 2024-25 tax year and have applied for Marriage Allowance you can expect a bill from HMRC for £269.60.

    If you haven't applied for Marriage Allowance you may well not be asked to pay the small amount of tax due for 2024-25 (<£20).

    From 2025-26 though you can expect to get a bill (assuming the triple lock increase is still in place).
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