📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

DB Pension Tax Free Pension Commencement Lump Sum

I have a deferred DB pension where I can take a £100k PCLS.   If I did take this £100k, would that take £100k off of what is the current £268K lifetime allowance and so leave me with £168K for use in UFPLS  on my DC ????
Thankyou.

Comments

  • Brie
    Brie Posts: 14,958 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Thought the LTA was being dropped?
    I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions 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.

    Click on this link for a Statement of Accounts that can be posted on the DebtFree Wannabe board:  https://lemonfool.co.uk/financecalculators/soa.php

    Check your state pension on: Check your State Pension forecast - GOV.UK

    "Never retract, never explain, never apologise; get things done and let them howl.”  Nellie McClung
    ⭐️🏅😇🏅
  • pterri
    pterri Posts: 368 Forumite
    Third Anniversary 100 Posts Name Dropper
    Brie said:
    Thought the LTA was being dropped?
    The lifetime allowance has been abolished (for now!) but the tax free limit of £268k was retained. And yes, my understanding is that the 100k would use some of it up. I’m in a similar position for my AVCs which I can take as tax free 
  • HappyHarry
    HappyHarry Posts: 1,831 Forumite
    Tenth Anniversary 1,000 Posts Name Dropper
    Yes - you currently have an LSA (lump sum allowance) of £268,275 unless you have applied for any transitional
    protection. Your £100,000 will be deducted from this.


    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
  • My bad, maybe I didn't explain myself properly.  I don't mean "the" old LTA. I mean the lifetime allowance of tax free cash which is capped at £268k now (1/4 of the old LTA).  Does the defined benefit PCLS count toward that tax free cash allowance???
  • FIREDreamer
    FIREDreamer Posts: 1,034 Forumite
    500 Posts Second Anniversary Name Dropper Photogenic
    My bad, maybe I didn't explain myself properly.  I don't mean "the" old LTA. I mean the lifetime allowance of tax free cash which is capped at £268k now (1/4 of the old LTA).  Does the defined benefit PCLS count toward that tax free cash allowance???
    Yes, it counts towards it. Only small pot tax free cash doesn’t.
  • MetaPhysical
    MetaPhysical Posts: 472 Forumite
    100 Posts First Anniversary Photogenic Name Dropper
    edited 22 August 2024 at 5:59PM
    Thanks all.
    So to continue the example.  I could take £100k of tax free cash from my DB pension and, if I wanted, I could take £68k from my DC pot to leave me with £100k "remainder" which I could then use up in UFPLS withdrawals on the DC over a number of years?????  I can slice and dice this however I see fit, up to the limit of £268k (as of now, understood it may reduce possibly) ?????
  • pterri
    pterri Posts: 368 Forumite
    Third Anniversary 100 Posts Name Dropper
    Thanks all.
    So to continue the example.  I could take £100k of tax free cash from my DB pension and, if I wanted, I could take £68k from my DC pot to leave me with £100k "remainder" which I could then use up in UFPLS withdrawals on the DC over a number of years?????  I can slice and dice this however I see fit, up to the limit of £268k (as of now, understood it may reduce possibly) ?????
    I think so, that’s what I plan to do
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.4K Banking & Borrowing
  • 253.3K Reduce Debt & Boost Income
  • 453.8K Spending & Discounts
  • 244.4K Work, Benefits & Business
  • 599.7K Mortgages, Homes & Bills
  • 177.2K Life & Family
  • 258K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.