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  • FIRST POST
    • IvyJay
    • By IvyJay 14th Mar 18, 5:11 PM
    • 34Posts
    • 8Thanks
    IvyJay
    Can I Cash my Pension Plan?
    • #1
    • 14th Mar 18, 5:11 PM
    Can I Cash my Pension Plan? 14th Mar 18 at 5:11 PM
    Hi Guys

    I'm a full-time landlord but some years ago I used to work for a large private company that had a non contributory pension scheme. I'll be 55 within the next 6 months and have received a letter from Aviva that the value of my plan is around 20k. I realise that no-one can give me specific advice but I am wondering if I can cash it in? I just don't know if that's an option. Aviva are sending me a pack with info but that may take a couple of weeks to arrive.

    As it's a small pension the cash value would be more beneficial to me as the pension wouldn't provide a substantial monthly income. I'd like to buy another property and have the extra cash to use for other things.
Page 1
    • MallyGirl
    • By MallyGirl 14th Mar 18, 5:14 PM
    • 2,688 Posts
    • 7,692 Thanks
    MallyGirl
    • #2
    • 14th Mar 18, 5:14 PM
    • #2
    • 14th Mar 18, 5:14 PM
    it will depend on the terms of the scheme. If you can take the lot you would be taxed on 75% of it
    • IvyJay
    • By IvyJay 14th Mar 18, 5:19 PM
    • 34 Posts
    • 8 Thanks
    IvyJay
    • #3
    • 14th Mar 18, 5:19 PM
    • #3
    • 14th Mar 18, 5:19 PM
    Thanks for that. I'll have to check as all the pension stuff is new to me.
    • dunstonh
    • By dunstonh 14th Mar 18, 5:29 PM
    • 92,656 Posts
    • 59,977 Thanks
    dunstonh
    • #4
    • 14th Mar 18, 5:29 PM
    • #4
    • 14th Mar 18, 5:29 PM
    As it's a small pension the cash value would be more beneficial to me as the pension wouldn't provide a substantial monthly income. I'd like to buy another property and have the extra cash to use for other things.
    On behalf of taxpayers, I thank you for your contribution to the treasury.

    However, may it better if you added to the pension. Pensions, whilst invested, are free of income tax and capital gains tax and not included in your estate for IHT. Can the same be said of your properties?
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • IvyJay
    • By IvyJay 14th Mar 18, 9:59 PM
    • 34 Posts
    • 8 Thanks
    IvyJay
    • #5
    • 14th Mar 18, 9:59 PM
    • #5
    • 14th Mar 18, 9:59 PM
    Thanks Mally! I can cash it in. Looking forward to buying my next property.
    • macman
    • By macman 14th Mar 18, 10:09 PM
    • 41,894 Posts
    • 17,379 Thanks
    macman
    • #6
    • 14th Mar 18, 10:09 PM
    • #6
    • 14th Mar 18, 10:09 PM
    Did you read post 2? If you are a basic rate taxpayer, you can receive 25% tax free. The remaining 15K will be taxed at 20%, so that's 3K gone already. If you are a higher rate taxpayer, as you may well be with this added to your income in the relevant tax year, then you will be taxed at 40%, so 6K tax.
    You are not going to be buying another property with the remaining 14K...
    No free lunch, and no free laptop
    • IvyJay
    • By IvyJay 14th Mar 18, 10:32 PM
    • 34 Posts
    • 8 Thanks
    IvyJay
    • #7
    • 14th Mar 18, 10:32 PM
    • #7
    • 14th Mar 18, 10:32 PM
    I will - that takes care of the main expense - the deposit. I recently bought a property with roughly the same amount. A limited company is a great tax vehicle.
    • atush
    • By atush 15th Mar 18, 11:11 AM
    • 16,709 Posts
    • 10,412 Thanks
    atush
    • #8
    • 15th Mar 18, 11:11 AM
    • #8
    • 15th Mar 18, 11:11 AM
    Too bad your limited company isnt paying into a pension for you?

    That is a great tax idea. AS a business expense it is fully deductible as an expense.
    • IvyJay
    • By IvyJay 15th Mar 18, 10:35 PM
    • 34 Posts
    • 8 Thanks
    IvyJay
    • #9
    • 15th Mar 18, 10:35 PM
    • #9
    • 15th Mar 18, 10:35 PM
    I'm so happy that you're so happy for me! (grins!)
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