Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • jim8888
    • By jim8888 14th Apr 18, 1:03 PM
    • 56Posts
    • 41Thanks
    jim8888
    Drawdown and Employment
    • #1
    • 14th Apr 18, 1:03 PM
    Drawdown and Employment 14th Apr 18 at 1:03 PM
    I turn 55 in November and am thinking of drawing down some of my pension while continuing in full time employment.
    I am thinking I want to take out about a 20k lump sum tax free, which would be well within the 25% of the pension's total worth. But, if I continue working (I am a higher rate tax payer) will I be able to take this as a tax free sum? Or, will it be added to my income for that year and taxed accordingly?
Page 1
    • Silvertabby
    • By Silvertabby 14th Apr 18, 1:12 PM
    • 3,247 Posts
    • 4,676 Thanks
    Silvertabby
    • #2
    • 14th Apr 18, 1:12 PM
    • #2
    • 14th Apr 18, 1:12 PM
    I turn 55 in November and am thinking of drawing down some of my pension while continuing in full time employment.
    I am thinking I want to take out about a 20k lump sum tax free, which would be well within the 25% of the pension's total worth. But, if I continue working (I am a higher rate tax payer) will I be able to take this as a tax free sum? Or, will it be added to my income for that year and taxed accordingly?
    Originally posted by jim8888
    It would indeed be tax free.

    However, are you sure that your pension scheme will allow this? A DB scheme won't, an old DC/personal scheme may not allow partial drawdown, and if it's part of your current emploment than all sorts of Ts and Cs may apply.
    • jim8888
    • By jim8888 14th Apr 18, 1:27 PM
    • 56 Posts
    • 41 Thanks
    jim8888
    • #3
    • 14th Apr 18, 1:27 PM
    • #3
    • 14th Apr 18, 1:27 PM
    Thanks, I transferred my old company DC pension into a SIPP, so I think, I can access it as I please....
    • xylophone
    • By xylophone 14th Apr 18, 2:25 PM
    • 26,488 Posts
    • 15,730 Thanks
    xylophone
    • #4
    • 14th Apr 18, 2:25 PM
    • #4
    • 14th Apr 18, 2:25 PM
    You transferred an old pension into a SIPP.

    http://www.hl.co.uk/pensions/drawdown/how-does-it-work

    If you should take income from a DC pension, be careful of MPAA.

    http://www.hl.co.uk/pensions/retirement-options/5-traps-hidden-in-pension-rules
    • jim8888
    • By jim8888 14th Apr 18, 2:50 PM
    • 56 Posts
    • 41 Thanks
    jim8888
    • #5
    • 14th Apr 18, 2:50 PM
    • #5
    • 14th Apr 18, 2:50 PM
    Thanks for the reminder on the MPAA. If I continue to work I'll have to watch any pension contributions I make don't exceed the 4,000. (As an aside, I asked my company if I could stop making contributions to a pension but still receive their contribution into my salary? They made this so damn complicated that I gave up, and took the pension instead.)
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

195Posts Today

1,552Users online

Martin's Twitter