Personal investment plan and tax

jeff_chandler

I’m in need of some good advice. My wife and myself are both in our late sixties and both retired. We have been looking at houses with a look to moving home. We currently live in a Terraced property but it’s quite too big for us now our three kids have moved along.

We put our house up for sale but never thought it would sell the second day. We have been looking at Bungalows but never realised how expensive they are. The ones we have seen need too much doing to them before they can become habitable. There is one property we’d love but would need to put seventy thousand towards it.

I have three pension policies where I am allowed to take 25% tax free. I also have a personal investment plan worth quite a bit. Together, the 25% and some from my personal investment plan would cover it. I’m unsure of the tax implications on my PIP if any at all. The value of my PIP has lost quite a bit since the Ukraine war but is down to the amount I invested initially and no gain has been made.

So, I was wondering if the £70,000 I have raised would be taxable.

Sorry I can’t be more specific but I don’t want to say how much the PIP is worth nor my pension pots.  

Jeff.

Jeff Chandler isn’t my real name just a character I played in a local play.

Dazed_and_C0nfused

A tax free lump sum taken from a defined contribution pension pot is, at it says tax free.  The only problem with this would be if you exceeded the overall limit (~£268k) for tax free lump sums. 

This is a lifetime figure so even if the amount you take now (plus any existing amounts taken which might contribute to your limit) isn't above that limit you need to think about any remaining uncrystallizsd pensions you have.

There may be no tax consequence from the PIP either however you would need to provide a lot more detail about exactly what this plan is for anyone to know for certain.

What documentation do you have for the PIP?

And I I remember you in that play Jeff, you played a blinder 😉

dunstonh

I’m unsure of the tax implications on my PIP if any at all. 

Personal investment plans were a marketing name used by the Halifax and covered their unwrapped investments and their onshore investment bond.   others may have used that marketing name.

The value of my PIP has lost quite a bit since the Ukraine war but is down to the amount I invested initially and no gain has been made.

It won't be down to the Russian invasion of Ukraine though.   Equities are up in that period.  Gilts and bonds are down.  

jimjames

jeff_chandler said:

We put our house up for sale but never thought it would sell the second day. We have been looking at Bungalows but never realised how expensive they are. The ones we have seen need too much doing to them before they can become habitable. There is one property we’d love but would need to put seventy thousand towards it.

Apart from the size of house, do you actually need to move? Normally for retirement the idea is to downsize to realise some capital rather than needing to pay out more. Are there any other suitable smaller houses that are cheaper than bungalows?