Small Pensions - cashing in

dunstonh

Marcon said:

dunstonh said:

Silvertabby said:

dunstonh said:

Marcon said:

dunstonh said:

An alternative option is to transfer them to the TPS

But that won't meet OP's objective of paying off their personal loan....

But is robbing your retirement fund to pay for something in your working life a sensible objective?

But a moot point if OP has been in TPS for more than 12 months, which is the impression I get.

I was going by the second paragraph, which suggests more recent.

A previous post indicates they've been in the TPS for well over 12 months.

In which case, opportunity missed....   TY

Avantime1

Hi All

Many many thanks for the comments.

I have been on the TPS scheme from just over 10 years now, with 12 until normal retirement age. Unfortunately when I started teaching I didn't know only had 12 months to move the pensions across. 

I've just gone UPS3 / Head of Dept, so am paying 40% income tax. I may well go p/t 50% in the next 5 years as a gradual retirement - week on, week off. 

Dazed_and_C0nfused

Avantime1 said:

Hi All

Many many thanks for the comments.

I have been on the TPS scheme from just over 10 years now, with 12 until normal retirement age. Unfortunately when I started teaching I didn't know only had 12 months to move the pensions across. 

I've just gone UPS3 / Head of Dept, so am paying 40% income tax. I may well go p/t 50% in the next 5 years as a gradual retirement - week on, week off. 

So it would be 40% tax on the taxable element of the £20k.

And there could be other impacts such as liability (or increased liability) to High Income Child Benefit Charge or even tapered Personal Allowance. 

QrizB

Ok, so allowing for 40% tax your £20k of pensions will yield £14k.

What's the interest rate on your personal loan? How does that compare to your expected investment growth in your pension?

Have you considered eg. stoozing on zero-interest credit cards as an alternative?

FIREDreamer

QrizB said:

Ok, so allowing for 40% tax your £20k of pensions will yield £14k.

What's the interest rate on your personal loan? How does that compare to your expected investment growth in your pension?

Have you considered eg. stoozing on zero-interest credit cards as an alternative?

It’s £12k not £14k so even worse.

QrizB

FIREDreamer said:

QrizB said:

Ok, so allowing for 40% tax your £20k of pensions will yield £14k.

What's the interest rate on your personal loan? How does that compare to your expected investment growth in your pension?

Have you considered eg. stoozing on zero-interest credit cards as an alternative?

It’s £12k not £14k so even worse.

How do you work that out?

£20k pension.

25% tax-free is £5k.

Remaining £15k less 40% tax is £9k

5+9=14?

FIREDreamer

QrizB said:

FIREDreamer said:

QrizB said:

Ok, so allowing for 40% tax your £20k of pensions will yield £14k.

What's the interest rate on your personal loan? How does that compare to your expected investment growth in your pension?

Have you considered eg. stoozing on zero-interest credit cards as an alternative?

It’s £12k not £14k so even worse.

How do you work that out?

£20k pension.

25% tax-free is £5k.

Remaining £15k less 40% tax is £9k

5+9=14?

Sorry I assumed £20,000 x 0.60 and forgot about the PCLS.