Lump Sum Payments

DRS1

Winchmore_Hill_Shot said:

dunstonh said:

Winchmore_Hill_Shot said:

Sorry yes the £200k is the TFLS from various pensions.  I will rely on the remaining pension for my income which I would look to begin at the same time (plus state pension).  My understanding is that this should give no tax liable on the lump sum.  Just checking that really.

Based on this information,

would it be drawdown or annuity?
if annuity, you would look to transfer the uncrystallised pension to the annuity provider and get them to pay the tax free cash.   And not do drawdown with each individual plan as you cannot combine multiple crystallised pensions into a single annuity.   i.e. 3 crystallised funds would result in 3 annuity payments.

Annuity is the current plan.   I had assumed, 3 funds with 3 sets of payments, unless anyone knows better.

You can do that but you don't have to.  At any given time one annuity provider will give the best annuity rate and you may want to pool the three pensions to give you a single annuity from that one provider.  It is not necessarily the best thing to just get an annuity from the same provider that holds your current pensions.

dunstonh

Winchmore_Hill_Shot said:

dunstonh said:

Winchmore_Hill_Shot said:

Sorry yes the £200k is the TFLS from various pensions.  I will rely on the remaining pension for my income which I would look to begin at the same time (plus state pension).  My understanding is that this should give no tax liable on the lump sum.  Just checking that really.

Based on this information,

would it be drawdown or annuity?
if annuity, you would look to transfer the uncrystallised pension to the annuity provider and get them to pay the tax free cash.   And not do drawdown with each individual plan as you cannot combine multiple crystallised pensions into a single annuity.   i.e. 3 crystallised funds would result in 3 annuity payments.

Annuity is the current plan.   I had assumed, 3 funds with 3 sets of payments, unless anyone knows better.

If you use the open market option method, it will be 3 payments on potentially different dates.  If you use the transfer method, then its 1 payment.

WIth multiple pensions, you would expect to use the transfer method.

xylophone

Each pension is DC with no safeguarded benefits?

Would it make life simpler to combine the three pensions into one and then arrange to take the PCLS/buy annuity?

Might it be worth taking the advice of an Independent Financial Adviser?

https://adviserbook.co.uk/

You would tick "confirmed independent" and other options required when the menu comes up.

Winchmore_Hill_Shot

Sorry, meant to mention that two (including the most substantial) are DB.

DRS1

Winchmore_Hill_Shot said:

Sorry, meant to mention that two (including the most substantial) are DB.

Ah That makes quite a difference!

You will get separate pensions from the DB schemes starting when you take the PCLS (ie the tax free cash).  And 25% isn't necessarily relevant.  You may find that you have choices about the amount of PCLS and that you can give up some of your pension to get more (or all) of your PCLS.  The important thing then will be the commutation rate used to work out how much pension you give up for how much lump sum.