Tax efficiency

needsmoneyhelp

Hi I took my 25% last year aged 63 and this jan following a health scare took £3000 I was taxed £600
and asked for a monthly drawdown of £750  and have been taxed £150
I was working approx 16 hours a weekup until nov
and have only worked 7 hours in dec and 24 in Jan
I only intend to work occasionally in the future as a bank carer 2/3 shifts a month  
I had asked for the most tax efficient way to be paid from my pension no one indicated I would be paying regular tax 
I am with Aegon and profile pensions

Dazed_and_C0nfused

needsmoneyhelp said:

Hi I took my 25% last year aged 63 and this jan following a health scare took £3000 I was taxed £600
and asked for a monthly drawdown of £750  and have been taxed £150
I was working approx 16 hours a weekup until nov
and have only worked 7 hours in dec and 24 in Jan
I only intend to work occasionally in the future as a bank carer 2/3 shifts a month  
I had asked for the most tax efficient way to be paid from my pension no one indicated I would be paying regular tax 
I am with Aegon and profile pensions

There is nothing much you can do from a "tax efficiency" perspective.  Unless maybe your employer offers a salary sacrifice pension?

But what you can do is ensure you receive the full benefit of your Personal Allowance and avoid paying too much tax during the tax year.  Although even if that did happen you would eventually get any overpaid tax back from HMRC.

You could ask HMRC to make the pension (is it one or two in payment?) your main income source and allocate your tax code allowance to that, so on £750/month no tax would be payable.

Marcon

needsmoneyhelp said:

Hi I took my 25% last year aged 63 and this jan following a health scare took £3000 I was taxed £600
and asked for a monthly drawdown of £750  and have been taxed £150
I was working approx 16 hours a weekup until nov
and have only worked 7 hours in dec and 24 in Jan
I only intend to work occasionally in the future as a bank carer 2/3 shifts a month  
I had asked for the most tax efficient way to be paid from my pension no one indicated I would be paying regular tax 
I am with Aegon and profile pensions

Your provider can only act on your instructions in terms of how much you wish to drawdown and when. They can't and won't pay 'in the most tax efficient way' because that isn't their role and they won't have the necessary information about a customer's finances.

If you have a regular income, you are going to be taxed on it - BUT will get a tax refund in due course. That's not much consolation if you have to wait for it, though! Has Dazed has suggested, consider asking HMRC to allocate your tax code to this pension if it is your main source of income, and that might circumvent the problem.

MikeJXE

May I ask what was your health scare ?