Work pension withdrawal

20122013

I am planning ahead for my pension withdrawal. As I hope to get back into paid employment for the next ten years, which will likely use up my basic personal tax allowance.

I currently have approximately £100,000 in a workplace pension with Scottish Widows from a former employer. While I do not need the funds immediately, I still have my tax allowance for the remainder of this financial year (after accounting for tax on my savings interest).

If I withdraw a portion of this pension now, I intend to reinvest it (which will be outside the ISA), I am thinking the benefits are less fees and more investment choices compare to SW offerings?

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/6654018/work-pension-withdrawal

Where does the ISA for into this?

Could MPAA be an issue given you are planning on working again?

What do you mean by "after accounting for tax on my savings interest"?

dunstonh

If I withdraw a portion of this pension now, I intend to reinvest it (which will be outside the ISA), I am thinking the benefits are less fees and more investment choices compare to SW offerings?

If the invesments choices and charges are a concern, then why not move the pension to a whole of market platform? That way the charges and investments would be the same cost as the ISA.

af1963

Assuming you're old enough to take it (55+) …

Advantage is that you could take some out without being taxed on the withdrawal. If you keep your taxable non-savings income to no more than the tax free allowance, you'd also have 6K available of tax free / 0% taxed savings interest bands.

Disadvantages are that MPAA would limit your future pension contributions, and that any future interest/growth on the amount withdrawn would be taxable (although maybe possible to get it into next year's ISA allowance?)

20122013

https://forums.moneysavingexpert.com/discussion/comment/81871697#Comment_81871697

It’s good to know about the MPAA.

I am applying for work mainly to join the NHS pension; as I only need four more months of work to be eligible for the scheme.

Will it make sense not to take any withdrawl from my Scottish Widow pension (Defined Contribution scheme ?) or does it not matter as I will be making a contribution to the NHS pension scheme (Defined benefit scheme?)

20122013

https://forums.moneysavingexpert.com/discussion/comment/81871685#Comment_81871685

MPAA - appreciate you have pointed it out

ISA & Saving interest - sorry to have caused confusion - please ignore.

Brie

4 months short for what?

20122013

https://forums.moneysavingexpert.com/discussion/comment/81871782#Comment_81871782

I am 4 months short as I needed to have worked for 2 full years before I am qualified to join the NHS pension scheme.

LHW99

Assuming you're old enough to take it (55+) …

This is the question - as if you're younger then all consideration of withdrawing from a pension is moot (unless it's a very special type of scheme - such as I believe some sports people may be able to use)