Pension withdrawal question

emile1973

Hello there
I am a little confused with regard to withdrawing from a pension and putting money back into it.

So, I assist my aunt as LPA and she has recently moved into a care home. We have paid out of savings but now need to sell her house which is taking longer than we thought. 

Our question is can we withdraw money from her work pension to cover the care fees until her house sells and then repay it to the pension? We understand the 25% tax free but what are we allowed to do with regard to repaying the pot?

As LOA I want to do the very best for my aunt and her pension.
Many thanks

DRS1

If she is not earning (which seems a safe assumption) then the most she can contribute to a pension in a tax year is £3600 (gross).

You can't just take money out of a pension and then put it back again.

If she has a flexible ISA she could do it with that perhaps.

TimeLord1

In short: Yes, you can withdraw the money, but "repaying" it isn’t as simple as putting it back into the same drawer. While there is no rule stopping you from taking a 25% tax-free lump sum to pay for care, the rules for putting money back in (reinvesting) are very specific and can trigger heavy tax penalties if handled incorrectly.

I would get some legal advice first.

Dazed_and_C0nfused

Her age could be a factor as well, once she's 75 the situation changes.

LHW99

As LPA anything you do must be in her interest (demonstrably so). If she needs funds to ensure she can remain in her chosen care home, then IMO use of her pension money to pay for it is legitimate.

You need to remember that anything from the pension, beyond the 25%, will be (potentially) taxable, so you may need to be careful not to take so much that she goes into a higher tax bracket.

Have you checked that she is getting attendance allowance (not means tested) hopefully at the higher rate?

If you need advice, an IFA who is also part of SOLLA could be helpful

https://societyoflaterlifeadvisers.co.uk/

Silvertabby

emile1973 said:

Hello there
I am a little confused with regard to withdrawing from a pension and putting money back into it.

So, I assist my aunt as LPA and she has recently moved into a care home. We have paid out of savings but now need to sell her house which is taking longer than we thought. 

Our question is can we withdraw money from her work pension to cover the care fees until her house sells and then repay it to the pension? We understand the 25% tax free but what are we allowed to do with regard to repaying the pot?

As LOA I want to do the very best for my aunt and her pension.
Many thanks

What exactly do you mean by 'work pension'?  If it's a DB (Final Salary) scheme that's already in payment then no, you/she won't be able to take out any further lump sums.

Please could you clarify - along with your aunt's age - before we go any further.