Drawing Work Pension in Two Lumps?

saraybach54 wrote: »

My husband earns £33k pa and has £47k in his work pension...
He wants to take the whole lot out in one go...
.

Assuming he's old enough to do it, and has some good reason to do it: for simplicity of arithmetic treat the £47k as £48k:

(i) Take the tax-free lump sum of about £12k, leaving about £36k.

Withdraw £10k of income. Then if your husband has no other income, income for 16/17 = £(33 + 10)k = £43k, so just avoids 40% tax. In 17/18 withdraw £12k, because the higher rate threshold will have moved up to £45k. Carry on until he's emptied it. It's daft to pay 40% tax when he needn't.

Mind you, he might avoid some 20% tax too if he put off emptying it until he's stopped work.

Why does he want to take the money now? what will her retire on if he does?

Dont take it in lump sums that would put him into HRT- it is a foolish way to waste your pension by paying too much tax on it.