Small pot rules

Mikey481

Under the small pots rule you can take unlimited number of small pots from occupational schemes.
However if you have already taken two from occupational schemes are you then limited to only taking a further one from a personal plan under the three small pots rule hope this makes sense.
Thanks

singhini

Mikey481 said:

Under the small pots rule you can take unlimited number of small pots from occupational schemes.
However if you have already taken two from occupational schemes are you then limited to only taking a further one from a personal plan under the three small pots rule hope this makes sense.
Thanks

I didn't think so, i thought they were separate (Occupational are separate to the max 3 from personal plans)

Occupational pension small pots

- You can take an unlimited number of small pots (each worth no more than £10,000) from different occupational pension schemes.

- Each must be a separate scheme (not just different arrangements within the same one).

- These do not count toward the three-pot personal limit.

Personal pension (non-occupational) small pots

- You can take up to three such pots (again, each ≤ £10,000) in your lifetime.

- These come from personal pension plans, including stakeholder pensions, SIPPs, or other contract-based arrangements.

Albermarle

Caveat being that not all occupation or personal pensions/SIPPs offer the facility to withdraw under the Small pots rule.
Probably because it is more trouble than its worth and it is only ever used by a few people, most of which I suspect are not using them for the intended purpose anyway. 

Mikey481

Albermarle said:

Caveat being that not all occupation or personal pensions/SIPPs offer the facility to withdraw under the Small pots rule.
Probably because it is more trouble than its worth and it is only ever used by a few people, most of which I suspect are not using them for the intended purpose anyway. 

Thanks for the clarification Im interested by your intended purpose comment could you elaborate 

Dazed_and_C0nfused

Mikey481 said:

Albermarle said:

Caveat being that not all occupation or personal pensions/SIPPs offer the facility to withdraw under the Small pots rule.
Probably because it is more trouble than its worth and it is only ever used by a few people, most of which I suspect are not using them for the intended purpose anyway. 

Thanks for the clarification Im interested by your intended purpose comment could you elaborate 

Not sure if these are the intended purpose or not but two reasons for using the small pots rule are,

1). Slightly increase the maximum tax free cash available above the normal £268k limit

2).  Take taxable income without triggering MPAA.

Albermarle

Mikey481 said:

Albermarle said:

Caveat being that not all occupation or personal pensions/SIPPs offer the facility to withdraw under the Small pots rule.
Probably because it is more trouble than its worth and it is only ever used by a few people, most of which I suspect are not using them for the intended purpose anyway. 

Thanks for the clarification Im interested by your intended purpose comment could you elaborate 

AIUI - the small pots rule was what it said on the tin. A way for someone to withdraw a small pot without too much other consequences.
It was not designed for wealthy pensioners with big pots to try and squeeze out more tax free cash, from taking multiple small pot withdrawals.
A loophole in other words.