Should I take private pension now as not a tax payer or wait

Kitten_grace2024

I am 61 and retirement age of 67. I have retired early so not paying tax now - should I take my private work pension now due to tax (not using allowance) or wait till 67 - especially as the stock markets are tumbling that will affect to pension pot. Any comments appreciated 

flaneurs_lobster

The first question (of many) to be able to offer an opinion is 

What money do you have to live on for the next six years?

Marcon

Kitten_grace2024 said:

I am 61 and retirement age of 67. I have retired early so not paying tax now - should I take my private work pension now due to tax (not using allowance) or wait till 67 - especially as the stock markets are tumbling that will affect to pension pot. Any comments appreciated 

Depends where you're invested - and with 6 years to go until you reach age 67, there's plenty of time for the markets to recover.

Stargunner

if you have no income, then you can take £12570 from your pension each tax year without having to pay tax on it. 

Marcon

Stargunner said:

if you have no income, then you can take £12570 from your pension each tax year without having to pay tax on it. 

OP clearly hasn't already taken tax free cash, so it would need to be £16,760 (ie £4,190 tax free cash + the corresponding amount of potentially taxable income of £12,570). You can't take 'only' taxable cash from a DC pension until you have withdrawn the relevant amount of tax free cash.

BikingBud

Will taking it later at a larger annual value kick you into paying a higher rate of tax eg the state pension by that time might consume all of your tax free allowance? 

SVaz

It rather depends whether you have to sell investments to fund your income.  What are you invested in and how much have they fallen?

On the other hand, If you’ve got sufficient cash funds in the pot then it makes absolute sense to draw your personal allowance and shove it into an ISA while rates are good. 

DRS1

SVaz said:

It rather depends whether you have to sell investments to fund your income.  What are you invested in and how much have they fallen?

On the other hand, If you’ve got sufficient cash funds in the pot then it makes absolute sense to draw your personal allowance and shove it into an ISA while rates are good. 

One other thought if you are going to put it all in an ISA is that you can invest it back into the same investment as you held in the pension.  That way if the investment recovers you get the benefit.  Of course you will be out of the market for a few days.   But it covers off most of the usual fear of cashing in at a loss.

Albermarle

Similar thread from a couple of days ago.

Taking all of private pension — MoneySavingExpert Forum