Confused!

Witchetywitch
Witchetywitch Posts: 3 Newbie
in Pensions, annuities & retirement planning
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

Comments

  • Mnd
    Mnd Posts: 1,699 Forumite
    First Anniversary Name Dropper First Post
    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
    No.79 save £12k in 2020. Total end May £11610
    Annual target £24000
  • maximumgardener
    maximumgardener Posts: 299 Forumite
    Witchetywitch wrote: »
    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
    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
    Brynsam Posts: 3,643 Forumite
    First Anniversary Name Dropper Combo Breaker First Post
    edited 9 August 2018 at 2:55PM
    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.
  • xylophone
    xylophone Posts: 44,393 Forumite
    Name Dropper First Anniversary First Post
    https://www.gov.uk/government/publications/pension-freedoms-and-dwp-benefits/pension-freedoms-and-dwp-benefits

    may be of interest.
  • Witchetywitch
    Witchetywitch Posts: 3 Newbie
    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
    xylophone Posts: 44,393 Forumite
    Name Dropper First Anniversary First Post
    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
    Witchetywitch Posts: 3 Newbie
    edited 9 August 2018 at 7:07PM
    Hi Folks
    Thanks for your help. Will consider all my options.
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