Savings

Keynesfun

Hi all 

I can get £35,000 out of my pension this year if needed 
do you think it’s better to take out and invest in an ISA 
or keep it tucked up in pension 

Dazed_and_C0nfused

Keynesfun said:

Hi all 

I can get £35,000 out of my pension this year if needed 
do you think it’s better to take out and invest in an ISA 
or keep it tucked up in pension 

What different investment would (could) you choose in an ISA compared to a pension?

Would this involve paying any tax?

jaypers

Pension should be looked at as an income, and when you get to draw on it is normally for a specific thing, be it income or paying off debts. Seems an unusual move to disinvest it from a pension fund to only put into a savings account. I would leave it if you’re not doing anything with it……remember that if the pension pot continues to rise, you’ll get 25% of that increase tax free so in effect you will get that benefit on what the £35k makes while it continues to be in a pension fund. 

badger09

Do you think that’s a good idea?
If so, why?

Keynesfun

Ok thanks 
leaving it in till required seems to be best advice 
thanks 

where_are_we

Unless you urgently need the money it is a bad idea. We do not know your complete financial position. If you have other income this year, which when added to 75% of £35K (25% will be tax free provided you have not already taken your tax free 25%) takes you into 40% tax band you will end up paying 40% tax on the excess income over £50,270.

Also passing on your pension could be a way of avoiding inheritance tax, so taking what you need gradually (if at all) according to circumstances would be a better idea.

lon_don

It might be a good idea to take out the 25% tax free lump sum sooner than later, if you think Labour will [win the next GE and] abolish it.