Pension

Nickyno

Am I correct in thinking you can take 25% lump sum tax free?

My question is, if you don't take the 25% lump sum will you be taxed on it

Marcon

Nickyno said:

Am I correct in thinking you can take 25% lump sum tax free?

My question is, if you don't take the 25% lump sum will you be taxed on it

If you have a defined contribution pension scheme, you can take 25% tax free either when you first access the pension, or spread over various withdrawals (each of which will have 25% tax free), subject to certain limits: https://www.gov.uk/tax-on-pension/tax-free


If you have a defined benefit pension scheme, the rules will dictate how much tax free cash you can take, which will be subject to HMRC maximum limits. You will only have one chance to take tax free cash - at the point you start to draw your DB pension. If you don't take any tax free cash, you'll be taxed on the whole of your DB pension income.

dunstonh

Am I correct in thinking you can take 25% lump sum tax free?

If your pension has a 25% tax free lump sum then yes.  If it has a different figure or is a defined benefit scheme then it will be a different amount.         If the pension has no tax free cash available, then it would be taxable.

My question is, if you don't take the 25% lump sum will you be taxed on it

There are only a very few scenarios where you wouldn't take the tax-free cash.    Maybe you could tell us what you are thinking.

Albermarle

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