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  • FIRST POST
    • Witchetywitch
    • By Witchetywitch 9th Aug 18, 7:55 AM
    • 3Posts
    • 3Thanks
    Witchetywitch
    Confused!
    • #1
    • 9th Aug 18, 7:55 AM
    Confused! 9th Aug 18 at 7:55 AM
    Hello
    I have lurked a bit to try to find the answer to my query but to no avail.
    My details are as follows-i am a 57 year old woman and not working at the moment as I am recovering from cancer-i am on ESA.
    I have no dependants and will receive a full state pension when I retire.
    I took a 25% lump sum from a small pension earlier this year-total fund was 50k and I am receiving the remainder monthly.
    I have found an even smaller pension worth just 20k and would like to know if I can take it all (I understand that 75% would be taxed) in one lump sum?
    Many thanks!
    WW
Page 1
    • Mnd
    • By Mnd 9th Aug 18, 10:46 AM
    • 632 Posts
    • 733 Thanks
    Mnd
    • #2
    • 9th Aug 18, 10:46 AM
    • #2
    • 9th Aug 18, 10:46 AM
    If the rules allow you could do what you suggest, or you may have to transfer

    Depending on how much your other pension is paying assuming you earn nothing else you could add them together to take up to 11850 without any tax implications over and above the 25%
    then do the same next year to avoid paying any tax.

    Also, dont forget you can pay in 2880 and get tax added to make 3600 now and next year and ongoing to maximise your income.

    You do have options so don't just cash it in with no thoughts first
    • maximumgardener
    • By maximumgardener 9th Aug 18, 10:49 AM
    • 283 Posts
    • 122 Thanks
    maximumgardener
    • #3
    • 9th Aug 18, 10:49 AM
    • #3
    • 9th Aug 18, 10:49 AM
    Hello
    I have lurked a bit to try to find the answer to my query but to no avail.
    My details are as follows-i am a 57 year old woman and not working at the moment as I am recovering from cancer-i am on ESA.
    I have no dependants and will receive a full state pension when I retire.
    I took a 25% lump sum from a small pension earlier this year-total fund was 50k and I am receiving the remainder monthly.
    I have found an even smaller pension worth just 20k and would like to know if I can take it all (I understand that 75% would be taxed) in one lump sum?
    Many thanks!

    WW
    Originally posted by Witchetywitch
    You simply need to ask your other pension provider for the options . It will depend on the Rules that they have in their scheme. you can phone them, email them or write to them.?
    they may allow you to do what you have done already but maybe not , so just check with
    them asap. good luck.
    • Brynsam
    • By Brynsam 9th Aug 18, 11:01 AM
    • 1,423 Posts
    • 1,020 Thanks
    Brynsam
    • #4
    • 9th Aug 18, 11:01 AM
    • #4
    • 9th Aug 18, 11:01 AM
    I presume this won't affect any benefits to which you are entitled? If you aren't sure, might be worth checking - turn2us.org.uk will be able to help.

    Hope your recovery is going well.
    Last edited by Brynsam; 09-08-2018 at 2:55 PM.
    • xylophone
    • By xylophone 9th Aug 18, 2:03 PM
    • 26,107 Posts
    • 15,465 Thanks
    xylophone
    • #5
    • 9th Aug 18, 2:03 PM
    • #5
    • 9th Aug 18, 2:03 PM
    https://www.gov.uk/government/publications/pension-freedoms-and-dwp-benefits/pension-freedoms-and-dwp-benefits

    may be of interest.
    • Witchetywitch
    • By Witchetywitch 9th Aug 18, 3:14 PM
    • 3 Posts
    • 3 Thanks
    Witchetywitch
    • #6
    • 9th Aug 18, 3:14 PM
    • #6
    • 9th Aug 18, 3:14 PM
    Thanks for all your replies. The following is from my pension provider (Aviva)

    <If your pension is worth 10,000 or less, you'll have the option to take it as a single small lump sum payment.
    If the value of your pension is worth over 10,000, but not more than 30,000, you may be able to take up to three small lump sum payments. Each small lump sum payment can't be more than 10,000.
    Government rules only allow you to take three small lump sum payments from personal pensions in your lifetime. This applies to all your pensions, not just those you have with us, so you'll need to consider any other pensions you might have>

    The pension in question is worth more than 10'000 but less than 30'000 and I have already taken a lump sum sum from my other pension in May this year.
    Does the above mean that I can take the 20'000 in my pension pot in 2 x 10'000 instalments and if so, what would be the best way to do this?
    I fully understand how taking lump sums would affect my benefits, thanks for pointing this out.
    Yet again, many thanks
    WW
    • xylophone
    • By xylophone 9th Aug 18, 3:50 PM
    • 26,107 Posts
    • 15,465 Thanks
    xylophone
    • #7
    • 9th Aug 18, 3:50 PM
    • #7
    • 9th Aug 18, 3:50 PM
    The advantage of "small lump sum payments" ("small pots") is that taking them does not trigger the "MPAA" - see here

    https://www.aegon.co.uk/support/faq/pension-technical/MPAA.html

    However, in your case it appears that you are already taking income from another money purchase pension so have already triggered it?


    https://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum

    See above re tax free /taxable parts of your Aviva pension.
    • Witchetywitch
    • By Witchetywitch 9th Aug 18, 5:11 PM
    • 3 Posts
    • 3 Thanks
    Witchetywitch
    • #8
    • 9th Aug 18, 5:11 PM
    • #8
    • 9th Aug 18, 5:11 PM
    Hi Folks
    Thanks for your help. Will consider all my options.
    Last edited by Witchetywitch; 09-08-2018 at 7:07 PM. Reason: Incorrect info
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