Advise needed for small pension pot of £9k (please ignore previous post)

haveabreak

Yes using family account. Other posts will not apply. Sorry for the confusion.

haveabreak

https://forums.moneysavingexpert.com/discussion/comment/82140714#Comment_82140714

Actually the husband has used the marriage allowance when i stopped working a few years back. This will not effect the outcome based on the amounts, will it?

xylophone

Yes only savings interest. Not used marriage allowance - how would that be an issue? Also where did you get the figure of £11,820?

If you/spouse use the marriage allowance ,the amount of income you can receive reduces.

https://www.litrg.org.uk/tax-nic/income-tax/tax-allowances/marriage-allowance

It appears that your only income is savings interest. See links in my post above concerning this.

If you were to take the pension in full in this tax year, £6750 of your Personal Allowance would be used up. You could then use the balance (£5820) plus the starting rate for savings (£5000) plus Personal Savings Allowance (£1000) against your non isa savings interest.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82141435#Comment_82141435

What matters is what you are doing in the tax year you take the pension - are you still giving him part of your personal allowance? When @xylophone says "the balance (£5820)" that is based on you having the full 12570 personal allowance not the reduced one.

haveabreak

https://forums.moneysavingexpert.com/discussion/comment/82141441#Comment_82141441

Yes, due to using marriage allowance I understand the 2026-27 personal allowance reduces to £11,310 (= 12,570 - 1,260). Correct?

If I take the pension in full the balance would then be £4,560 (=11,310 - 6,750)

I will earn about £250 in interest outside ISA. No other income.

So I think it will be ok.

Interestingly, form P50Z (to reclaim the pension tax) does not require you to state any interest income.