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State Pension and private Pension

Old_Possum
Posts: 14 Forumite

I have a private pension but have only withdrawn the tax free amount hence at present I am not a tax-payer and therefore receive my full state pension. If I withdraw £10K from my private pension how does that impact on my non tax payer status? I realise I would no longer get the full state pension but is that then readjusted in the next financial year or does my one off £10K withdrawal from the private pension make me a tax-payer for the foreseeable future?
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Comments
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You will always get your full state pension, the state pension is never taxed at source. Any tax due to exceeding your personal allowance would need to come from your private pension income.3
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Thanks for that but why then does my other half get slightly less state pension than me despite likewise working all his life? He does have a company pension and that is taxed at source.0
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it will be related to his working history - being contracted out for example will affect what he getsI’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 -
Be aware that when you withdraw the £10K it may well get overtaxed as they will apply an emergency tax code.
This would happen whether you were drawing the state pension or not.
You will probably have to give HMRC a call at some point to sort it out.
Taking one off/irregular payments tends to often cause problems and paying too much tax. Especially as in your case you maybe a taxpayer one year, and then not the next. However you will get back any tax you have overpaid at some point.1 -
Is it possible to take out a small amount until HMRC issue a tax code & then take out the larger amount?
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badmemory said:Is it possible to take out a small amount until HMRC issue a tax code & then take out the larger amount?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.0 -
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So would I be right in thinking - take a small amount now, then the larger amount when you get the tax code, then a small amount in March - would make the tax paid correct?
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