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USS DB pension claiming tax free lump sum bur not the annual pension (just yet)
MR_Johnson67
Posts: 9 Forumite
Due to me only finding out I have to pay CGT of my house sale, I need to make up a short fall. (I separated from my partner (not married) and moved out).
My question has zero to do with speculation around the budget,
I am 57.
I have a USS pension (DB).
If I understand the USS website, I can get £80K as a lump sum, and 25K per year as a "pension".
I am working with an income of £60K (i contributing to its pension (NOT USS) but at minimal rate, and only been there for 2.5 years, and expect to be there for 4 more years in other words the pension will be small)
The 80K will come in handy, but not the 25K, and given I will pay 40% tax on it, it seems a waste.
If I was to not claim the 25K, would it add value to my pension when I claim it in 4 years?
specualtion .....
Normally investing in AVC in my position would be foolish, but if I max out on tax free pension contributions, I could live off what's left and the 25K
My question has zero to do with speculation around the budget,
I am 57.
I have a USS pension (DB).
If I understand the USS website, I can get £80K as a lump sum, and 25K per year as a "pension".
I am working with an income of £60K (i contributing to its pension (NOT USS) but at minimal rate, and only been there for 2.5 years, and expect to be there for 4 more years in other words the pension will be small)
The 80K will come in handy, but not the 25K, and given I will pay 40% tax on it, it seems a waste.
If I was to not claim the 25K, would it add value to my pension when I claim it in 4 years?
specualtion .....
Normally investing in AVC in my position would be foolish, but if I max out on tax free pension contributions, I could live off what's left and the 25K
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Comments
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You won’t be able to take the tax free lump sum but not the pension income.
You could take the tax free lump sum and the pension income, and add the additional (gross) pension income to a personal pension in order to reclaim
the tax relief.I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.2 -
@HappyHarry has given you a perfect answer.
As a matter of interest why are you paying CGT on your house sale? If it was your PPR then it should be free of CGT and you have a period after moving out (9 months) in which to sell without being hit with CGT.1 -
I moved out ten years ago, and without access to MSE forums, I just assumed I would not have to pay CGT. Its sort of awkward that we agreed on a 50:50 split without me knowing I would get hit with CGT.DRS1 said:@HappyHarry has given you a perfect answer.
As a matter of interest why are you paying CGT on your house sale? If it was your PPR then it should be free of CGT and you have a period after moving out (9 months) in which to sell without being hit with CGT.
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But if you've sold the house, you presumably have the cash from the sale. I don't understand why you would need to involve a pension?
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