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Taking tax-free lump sum from pension at age 55 - from one or all pots?

AdvicePlease123

AdvicePlease123 Posts: 4 Newbie

First Post

24 March at 6:11PM in Pensions, annuities & retirement planning

Under advice, I have been consolidating various workplace pensions ahead of turning 55 in April, when I plan to take 25% tax free. I have been left with two pension pots.

Do I need to take 25% of each pot, or does HMRC take both into account so I can take 25% of the TOTAL amount just from one pot and leave the other as it is (and reduce the paperwork involved.)

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Comments

QrizB Posts: 16,666 Forumite

24 March at 6:20PM

Assuming nothing weird, you can take 25% from each pot. But if you take it now, you won't have it when you retire ...
You say "under advice". Your (I)FA should be able to answer all these questions for you.

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SVaz Posts: 537 Forumite

24 March at 7:05PM

You can’t take say 50% from pot one and leave pot 2 alone. It’s strictly up to 25% from each individual pot.

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dunstonh Posts: 119,223 Forumite

24 March at 7:34PM

SVaz said:

You can’t take say 50% from pot one and leave pot 2 alone. It’s strictly up to 25% from each individual pot.

Trivia point..... Technically, the rules allow it. However, it is rarely utilised outside of defined benefit schemes and AVCs.

I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.

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MetaPhysical Posts: 412 Forumite

24 March at 8:43PM

...and the total across all pots cannot be more than £268k.

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