Pension withdrawal

jeff_chandler

Hi. 
I have pension pots with Scottish Widows. I have already took the 25% from this pension and is the least valuable.I only wanted to take £2000 from it but I don't want to take 25% from my other pots as they are worth quite a bit. 
I contacted Scottish widows today where they told me I'd be paying around 40-45% tax. I've put this on hold. 
If I did withdraw the £2000 the tax implications seem a tad high, will I be able to claim some of it back at a later date. I only draw my state pension and that is my only source of income. My wife also draws state pension as her only income. 
It was just to use for days out and a few items I'd like to buy. 

Kind regards Jeff. 

Dazed_and_C0nfused

jeff_chandler said:

Hi. 
I have pension pots with Scottish Widows. I have already took the 25% from this pension and is the least valuable.I only wanted to take £2000 from it but I don't want to take 25% from my other pots as they are worth quite a bit. 
I contacted Scottish widows today where they told me I'd be paying around 40-45% tax. I've put this on hold. 
If I did withdraw the £2000 the tax implications seem a tad high, will I be able to claim some of it back at a later date. I only draw my state pension and that is my only source of income. My wife also draws state pension as her only income. 
It was just to use for days out and a few items I'd like to buy. 

Kind regards Jeff. 

Are you confusing the tax ultimately payable with the tax initially deducted by the pension company?

How do Scottish Widows know how much tax you would ultimately have to pay?

If this is the first taxable payment to be taken they would normally use the emergency tax code (1257L) so on £2,000 they would deduct £190.

Which ultimately might be too much.  Or not enough.  Depends what other taxable income you have in the same tax year.

jeff_chandler

Thanks for your reply. Yes, I was told it would be an emergency tax code. I was also told I would pay between 40-45% tax. No other income. 

Dazed_and_C0nfused

jeff_chandler said:

Thanks for your reply. Yes, I was told it would be an emergency tax code. I was also told I would pay between 40-45% tax. No other income. 

If this is your first taxable withdrawal (of £2,000) then I cannot see how they would deduct that much.

With the emergency tax code the first £1,048 has no tax deducted from it.

For larger first taxable amounts some 40% or 45% isn't at all unusual but not on £2,000.

Ultimately though HMRC will automatically refund any tax that is overpaid.  Or you claim claim it back if you need the overpayment urgently.