Two pensions and their lump sums

King_Tut66

Hi all. I was made redundant a few years ago and took early retirement. An amount of redundancy was paid back into my pension and I then almost hit the max on the tax free lump sum I could withdraw. I have since started work part time and pay into a SIPP and basic workplace pension to reduce my tax and was using the SIPP  as an IHT free pot for my family (I know the budget has now scuppered this). Question is how is the max tax free payment managed/policed across multiple pension pots? If I let each of the new pension people give me 25% tax free I will exceed the tax fee ceiling. Thankyou. 

Marcon

King_Tut66 said:

Hi all. I was made redundant a few years ago and took early retirement. An amount of redundancy was paid back into my pension and I then almost hit the max on the tax free lump sum I could withdraw. I have since started work part time and pay into a SIPP and basic workplace pension to reduce my tax and was using the SIPP  as an IHT free pot for my family (I know the budget has now scuppered this). Question is how is the max tax free payment managed/policed across multiple pension pots? If I let each of the new pension people give me 25% tax free I will exceed the tax fee ceiling. Thankyou. 

Have a look at https://www.ajbell.co.uk/pensions/transitional-tax-free-amount-certificate which should help.

The budget proposals aren't (yet) enshrined in law and may well change between now and their planned introduction in 2027, so beware jumping any guns!

xylophone

https://techzone.abrdn.com/public/pensions/Tech-guide-tax-free-cash

Each time you access a pension you will be asked about LTA used.