UK pensions

[MAZ3]

the single tier pension is available to 'contracted out' people, but you will get a percentage deduction for those years, as you would on the current system.

see here- https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf

edit pension forecast forms here - https://www.gov.uk/state-pension-statement

Thanks Steve,

Very useful links,need my thinking head on to work it out and ask for a pension quote.

Regards Maz

Edited March 25, 2015 by MAZ3

[Liquorice]

JB300, on 25 Mar 2015 - 10:15, said:

steve187" data-cid="9226953" data-time="1427244699" data-date="Today, 08:51 said:

class 3 NI are about £13.55 a week lets say £15.00, that's £780 a year, say a state pension will be £150,00 a week divided by 35 years = £4.28 per week for every year you buy. thats £222.56 a year. so 3.5 years to break even. If somehow you can pay class 2, its less than a year to break even.

I can't remember the exact number but this was around 3 years after leaving the UK & they were asking for a few thousand £s to "Catch Up" (now I think about it, there was also 18 months of me being self-employed as well) & my projected State Pension was around £2,100 pa (around £40 per week) so the difference before & after paying wasn't worth it to me.

Obviously my projected payment are so low because I was contracted out of SERPS for the majority of my career (around 21 years) & it's possible that the £40 per week would have risen if I had started to pay but as I said, I'm assuming £0 from them & have planned accordingly.

Does raise an interesting point though, is the new minimum pension payable to somebody who was contracted out of SERPS or is this yet one more factor to consider in the new "Simplified" state pension scheme?

Edit: I think Faz has answered my question above (& Steve below, thanks guys) & I'm expecting to get around 4/30ths of the BSP or as I planned next to sweet FA.

Can't grumble though, I'm happy with the 21/60ths (index linked) of my final salary at 60, reducing by whatever I do get from BSP at 65

When I decide to take early retirement last year, I shopped around to get the best rates for my private pension annuity pot.

I was given the choice of a higher fixed monthly income without annual increments, or a lower monthly income with annual increments.

I calculated that at a 2 1/2% yearly increment, it would take me 18 years to be on the same flat rate they offered without any increments.

It would then take another 6 years to make up the difference, so I opted for the fixed monthly income for the rest of my life.

So up until the age of 85 I'm going to benefit from my choice.

After age 85 I probably won't know who I am, who you are, where I am, or give a flying f***.

If I manage to reach that ripe old age of 85, I'll be content to just keep breathing in and out.

[Liquorice]

@Maz3 and JB300

If you haven't already read this link http://www.thisismoney.co.uk/money/pensions/article-2634215/Why-millions-WONT-155-new-state-pension-theyre-expecting.html then I recommend you read the full article.

[MAZ3]

@Maz3 and JB300

If you haven't already read this link http://www.thisismoney.co.uk/money/pensions/article-2634215/Why-millions-WONT-155-new-state-pension-theyre-expecting.html then I recommend you read the full article.

I've just read it thanks,I always thought I would only get the basic BSP,currently £113.75. So anything more than that would be a bonus,I had pushed any

Calculations to the back of my mind.

But with this new flat rate,things have changed,those goal posts again!.

Regards

[alfieconn]

Chivas, on 24 Mar 2015 - 23:00, said:Chivas, on 24 Mar 2015 - 23:00, said:

Anyone care to Comment on this...........I was going put in the dedicated thread but it attracts less visitors

Pension Pots can be taken from April 6th in Cash rather than having to Purchase an annuity as at present........

Now if the entire Pot is taken in one go 25% is tax free and 75% is subject to tax at your prevailing rate........Am sure we all agree......Life Companies issues tax paid certificate and you can submit this to the Inland Revenue and you may receive a rebate depending if you didnt use all your Personal allowance.......hopefully we all agree

However

What if you only want to take £25,000 out of Pot thats valued at £100,000..........

Now my interpretation is that quarter is tax free hence £6250 and the balance is taxed and remitted to you...............

But reading other forums and other Poster views many are under the impression that the entire £25,000 will be tax free because it equates to 25% of the Pot

However I personally cannot see that this is correct BECAUSE the Value of the remainder of the Pot will still be fluctuating and could soar to 200k as an example or worse case scenario drop to vitually nothing..........Now if that happened you having drawn out 25k would have had your entire Pension Pot tax free..........

Surely EACH drawdown/withdrawal whatever you want to call it is subject to the first scenario I stated..........?? ie £6250 tax free the balance taxed....??

Hope to hell thats clear for others to understand......!!

Hi Chivas, do you mind if I clarify some points you made.

Firstly from April 2015 only those aged over 55 and considering retirement will be able to access their pots.

Those who are already drawing from a private/company pension will not get access to the remainder of their pots until April 2016.

You also misinterpret the tax implications.

Scenario 1.

Assuming you retire April 2015 and working on your figure of a £100,000 pot.

You can withdraw 25% tax free, that is £25,000. That does not affect your personal allowance.

The remainder is taxed at 20% up to the higher tax limit (around £42,285).

Thereafter the remainder would be taxed at 40%

i.e. £100,000 pot.

£25,000 tax free

£10,600 tax free personal allowance (assuming you have no other income. i.e. early retirement,not taking state pension)

£35,600 - £42,285 taxed at 20%. That's £6,685 taxed at 20% (£1,337 tax deducted)

£42,285 - £100,000 taxed at 40%. That's £57,715 taxed at 40% (£23,086 tax deducted)

If my maths is correct from a pot of £100,00 you'd pay £24,423 tax.

If at the same time of cashing your pot you started to receive state pension, then that would take up most of your personal income allowance and you'd pay around £25,000 tax.

You can only receive the tax free lump sum once, thereafter you are subject to tax above your personal allowance of £10,600.

Assuming you retire April 2015, the state pension is £155 per week, personal allowance is £10,600, and you have a private pension pot of £100,000.

You can withdraw £25,000 tax free from your pension pot.

Your annual state pension would be £8,060pa

You could withdraw another £2,540pa from your pot tax free. (£8060 + £2540 = £10,600)

Anything above that extra £2,540pa from your pension pot would be taxed at 20% up to the higher limit of £42,285pa

I also have read what Chivas is saying, if you use a flexible drawdown, can you take a tax free lump sum from the 100,000 at one time, EG. if you took it in increments of 25,000 the first one would be tax free and then you would pay tax less your TA on the remaining 3 increments of 25,000, or would each increment of 25,000 be 25% tax free (6,250) and pay tax on the rest less your TA.

Perhaps it's worth mentioning that if you decide to take the lump sum over a number of years, using your TA could reduce your tax to zero.

Faz, apparently when you make a withdrawal from your pot, the pension company will them multiply the taxable amount by 12 to determine if you have to pay emergency tax at 40% and then you would have to claim back a rebate from HMRC !

http://www.thisismoney.co.uk/money/pensions/article-2966766/Savers-using-pension-freedom-warned-pay-emergency-tax.html

Edited March 25, 2015 by alfieconn

[Chivas]

Chivas, on 24 Mar 2015 - 23:00, said:Chivas, on 24 Mar 2015 - 23:00, said:

Anyone care to Comment on this...........I was going put in the dedicated thread but it attracts less visitors

Pension Pots can be taken from April 6th in Cash rather than having to Purchase an annuity as at present........

Now if the entire Pot is taken in one go 25% is tax free and 75% is subject to tax at your prevailing rate........Am sure we all agree......Life Companies issues tax paid certificate and you can submit this to the Inland Revenue and you may receive a rebate depending if you didnt use all your Personal allowance.......hopefully we all agree

However

What if you only want to take £25,000 out of Pot thats valued at £100,000..........

Now my interpretation is that quarter is tax free hence £6250 and the balance is taxed and remitted to you...............

But reading other forums and other Poster views many are under the impression that the entire £25,000 will be tax free because it equates to 25% of the Pot

However I personally cannot see that this is correct BECAUSE the Value of the remainder of the Pot will still be fluctuating and could soar to 200k as an example or worse case scenario drop to vitually nothing..........Now if that happened you having drawn out 25k would have had your entire Pension Pot tax free..........

Surely EACH drawdown/withdrawal whatever you want to call it is subject to the first scenario I stated..........?? ie £6250 tax free the balance taxed....??

Hope to hell thats clear for others to understand......!!

Hi Chivas, do you mind if I clarify some points you made.

Firstly from April 2015 only those aged over 55 and considering retirement will be able to access their pots.

Those who are already drawing from a private/company pension will not get access to the remainder of their pots until April 2016.

You also misinterpret the tax implications.

Scenario 1.

Assuming you retire April 2015 and working on your figure of a £100,000 pot.

You can withdraw 25% tax free, that is £25,000. That does not affect your personal allowance.

The remainder is taxed at 20% up to the higher tax limit (around £42,285).

Thereafter the remainder would be taxed at 40%

i.e. £100,000 pot.

£25,000 tax free

£10,600 tax free personal allowance (assuming you have no other income. i.e. early retirement,not taking state pension)

£35,600 - £42,285 taxed at 20%. That's £6,685 taxed at 20% (£1,337 tax deducted)

£42,285 - £100,000 taxed at 40%. That's £57,715 taxed at 40% (£23,086 tax deducted)

If my maths is correct from a pot of £100,00 you'd pay £24,423 tax.

If at the same time of cashing your pot you started to receive state pension, then that would take up most of your personal income allowance and you'd pay around £25,000 tax.

You can only receive the tax free lump sum once, thereafter you are subject to tax above your personal allowance of £10,600.

Assuming you retire April 2015, the state pension is £155 per week, personal allowance is £10,600, and you have a private pension pot of £100,000.

You can withdraw £25,000 tax free from your pension pot.

Your annual state pension would be £8,060pa

You could withdraw another £2,540pa from your pot tax free. (£8060 + £2540 = £10,600)

Anything above that extra £2,540pa from your pension pot would be taxed at 20% up to the higher limit of £42,285pa

I also have read what Chivas is saying, if you use a flexible drawdown, can you take a tax free lump sum from the 100,000 at one time, EG. if you took it in increments of 25,000 the first one would be tax free and then you would pay tax less your TA on the remaining 3 increments of 25,000, or would each increment of 25,000 be 25% tax free (6,250) and pay tax on the rest less your TA.

Perhaps it's worth mentioning that if you decide to take the lump sum over a number of years, using your TA could reduce your tax to zero.

Faz, apparently when you make a withdrawal from your pot, the pension company will them multiply the taxable amount by 12 to determine if you have to pay emergency tax at 40% and then you would have to claim back a rebate from HMRC !

http://www.thisismoney.co.uk/money/pensions/article-2966766/Savers-using-pension-freedom-warned-pay-emergency-tax.html

I should have qualified my post slightly more......apologies

Forget retirement Income etc in my Case........Am only 55 and not intending to take any of Pot as a Pension

Its purely a withdrawal exercise and personal choice at that.......whether thats right or wrong no doubt I'll find out in the future

Am no clearer after reading the tho posts quoted........I recall a Financial Guru couple weeks ago on Sky Tv talking about what was briefly touched on above but by withdrawing xyz each year and the taxable element remaining within the personal allowance its possible for some to effectively draw their entire pot tax free.....

[Chivas]

Referring to above post and rather than editing.................

This is live situation.........My Pot is £100,000 plus.......am 55

I want to take out £10,000 a year.........each year, hopefully with the residue inceasing in value

My take is that for each withdrawal I will get £2500 tax free and £7500 liable for tax at 20%.............Forget personal allowances etc for ease of question. Overpaid tax I can can claim back

Is my calculation correct.........??

[Chivas]

I wanted to edit above but unable for some reason.....

The reason I ask is because in the quoted post of earlier its stated in bold that a tax free withdrawal can only be made once

That cant possibly be correct surely..........??

If I take 10k out of a 100k pot are we saying I lose all rights to any tax free element in the remaining 90k......??

That cant be correct.....

[alfieconn]

Chivas, on 24 Mar 2015 - 23:00, said:Chivas, on 24 Mar 2015 - 23:00, said:

Anyone care to Comment on this...........I was going put in the dedicated thread but it attracts less visitors

Pension Pots can be taken from April 6th in Cash rather than having to Purchase an annuity as at present........

Now if the entire Pot is taken in one go 25% is tax free and 75% is subject to tax at your prevailing rate........Am sure we all agree......Life Companies issues tax paid certificate and you can submit this to the Inland Revenue and you may receive a rebate depending if you didnt use all your Personal allowance.......hopefully we all agree

However

What if you only want to take £25,000 out of Pot thats valued at £100,000..........

Now my interpretation is that quarter is tax free hence £6250 and the balance is taxed and remitted to you...............

But reading other forums and other Poster views many are under the impression that the entire £25,000 will be tax free because it equates to 25% of the Pot

However I personally cannot see that this is correct BECAUSE the Value of the remainder of the Pot will still be fluctuating and could soar to 200k as an example or worse case scenario drop to vitually nothing..........Now if that happened you having drawn out 25k would have had your entire Pension Pot tax free..........

Surely EACH drawdown/withdrawal whatever you want to call it is subject to the first scenario I stated..........?? ie £6250 tax free the balance taxed....??

Hope to hell thats clear for others to understand......!!

Hi Chivas, do you mind if I clarify some points you made.

Firstly from April 2015 only those aged over 55 and considering retirement will be able to access their pots.

Those who are already drawing from a private/company pension will not get access to the remainder of their pots until April 2016.

You also misinterpret the tax implications.

Scenario 1.

Assuming you retire April 2015 and working on your figure of a £100,000 pot.

You can withdraw 25% tax free, that is £25,000. That does not affect your personal allowance.

The remainder is taxed at 20% up to the higher tax limit (around £42,285).

Thereafter the remainder would be taxed at 40%

i.e. £100,000 pot.

£25,000 tax free

£10,600 tax free personal allowance (assuming you have no other income. i.e. early retirement,not taking state pension)

£35,600 - £42,285 taxed at 20%. That's £6,685 taxed at 20% (£1,337 tax deducted)

£42,285 - £100,000 taxed at 40%. That's £57,715 taxed at 40% (£23,086 tax deducted)

If my maths is correct from a pot of £100,00 you'd pay £24,423 tax.

If at the same time of cashing your pot you started to receive state pension, then that would take up most of your personal income allowance and you'd pay around £25,000 tax.

You can only receive the tax free lump sum once, thereafter you are subject to tax above your personal allowance of £10,600.

Assuming you retire April 2015, the state pension is £155 per week, personal allowance is £10,600, and you have a private pension pot of £100,000.

You can withdraw £25,000 tax free from your pension pot.

Your annual state pension would be £8,060pa

You could withdraw another £2,540pa from your pot tax free. (£8060 + £2540 = £10,600)

Anything above that extra £2,540pa from your pension pot would be taxed at 20% up to the higher limit of £42,285pa

I also have read what Chivas is saying, if you use a flexible drawdown, can you take a tax free lump sum from the 100,000 at one time, EG. if you took it in increments of 25,000 the first one would be tax free and then you would pay tax less your TA on the remaining 3 increments of 25,000, or would each increment of 25,000 be 25% tax free (6,250) and pay tax on the rest less your TA.

Perhaps it's worth mentioning that if you decide to take the lump sum over a number of years, using your TA could reduce your tax to zero.

Faz, apparently when you make a withdrawal from your pot, the pension company will them multiply the taxable amount by 12 to determine if you have to pay emergency tax at 40% and then you would have to claim back a rebate from HMRC !

http://www.thisismoney.co.uk/money/pensions/article-2966766/Savers-using-pension-freedom-warned-pay-emergency-tax.html

Sorry Chivas, don't know where "I also have read what Chivas is saying" came from ! meant to say that I'm also none the wiser as iv'e read that both scenarios apply !

Edited March 25, 2015 by alfieconn

[JB300]

@Maz3 and JB300

If you haven't already read this link http://www.thisismoney.co.uk/money/pensions/article-2634215/Why-millions-WONT-155-new-state-pension-theyre-expecting.html then I recommend you read the full article.

Thanks Faz, very interesting article & some good points made in the comments on it...

Cheers

Eric

[JB300]

I wanted to edit above but unable for some reason.....

The reason I ask is because in the quoted post of earlier its stated in bold that a tax free withdrawal can only be made once

That cant possibly be correct surely..........??

If I take 10k out of a 100k pot are we saying I lose all rights to any tax free element in the remaining 90k......??

That cant be correct.....

If that were the case you're better of taking the full £25,000 (plus any unused Personal Allowance) & sticking the £15,000 (+) in a savings account for a year or 2.

In fact, you're better off doing that anyway unless you have a discipline problem (aka known as a gf/wife ) in not touching the money or by having it you would lose any benefits (no offense intended by mentioning either of those points [emoji106])

[alfieconn]

I wanted to edit above but unable for some reason.....

The reason I ask is because in the quoted post of earlier its stated in bold that a tax free withdrawal can only be made once

That cant possibly be correct surely..........??

If I take 10k out of a 100k pot are we saying I lose all rights to any tax free element in the remaining 90k......??

That cant be correct.....

Basicly from reading further there are 2 options :

A. You take the whole lot out and get 25% tax free.

B. You drawdown an amount as and when you need it and 25% is tax free each time.

Apparently if you want a flexible drawdown as in B. then you might have to transfer to a different fund that allows this, perhaps with higher charges.

Edited March 25, 2015 by alfieconn

[Chivas]

I wanted to edit above but unable for some reason.....

The reason I ask is because in the quoted post of earlier its stated in bold that a tax free withdrawal can only be made once

That cant possibly be correct surely..........??

If I take 10k out of a 100k pot are we saying I lose all rights to any tax free element in the remaining 90k......??

That cant be correct.....

Basicly from reading further there are 2 options :

A. You take the whole lot out and get 25% tax free.

B. You drawdown an amount as and when you need it and 25% is tax free each time.

Apparently if you want a flexible drawdown as in B. then you might have to transfer to a different fund that allows this, perhaps with higher charges.

Right thats exactly my take on it...........

My pension provider will allow up to 4 Ad Hoc withdrawals and then £20 each time so obviously no issue with that charge.....

[alfieconn]

I wanted to edit above but unable for some reason.....

The reason I ask is because in the quoted post of earlier its stated in bold that a tax free withdrawal can only be made once

That cant possibly be correct surely..........??

If I take 10k out of a 100k pot are we saying I lose all rights to any tax free element in the remaining 90k......??

That cant be correct.....

Basicly from reading further there are 2 options :

A. You take the whole lot out and get 25% tax free.

B. You drawdown an amount as and when you need it and 25% is tax free each time.

Apparently if you want a flexible drawdown as in B. then you might have to transfer to a different fund that allows this, perhaps with higher charges.

From reading even further Option C is what you said earlier Chivas !

C. You can take up front 25% tax free and drawdown the rest as and when you want it.

[Ricardo]

Can I just point out that, due to inflation, the Pound you contribute now towards buying extra pension, is more valuable than the pound you will be paid (if HMG doesn't go bust) in several years' time ?

Also the risk of buying extra pension-credits now, and then dying before you actually start to receive that pension, might be small but is still real.

[Liquorice]

You can take 25% of your total pension pot tax free.

Thereafter each year you can withdraw up to the personal allowance tax free.

Quote

Basicly from reading further there are 2 options :

A. You take the whole lot out and get 25% tax free.

B. You drawdown an amount as and when you need it and 25% is tax free each time

Assuming a pot of £100,000 to make it easier.

A. Yes. £25,000 tax free lump sum. £25,000 - £42, 285 taxed at 20%. Over £42,285 taxed at 40%

B. No. The tax free amount is 25% of the total pot. Once you've drawn £25,000 the rest is taxable.

@Chivas.

If you have a pot of over £100K, and having 10/12 years before you receive a state pension, personally I'd take the 25% tax free sum the first year, then every year thereafter the maximum your personal allowance will allow before paying tax. (£10,600 from April)

That will allow you to draw the complete pot tax free before you start receiving state pension.

That assumes that will be your only income.

You can withdraw amounts however you wish, but only the first 25% of the total pot is tax free.

Bare in mind that unless you invest or save those funds, then at age 65/67 you'll only receive the state pension

alfiecon, added a very useful link about the tax implications that I recommend you read; http://www.thisismoney.co.uk/money/pensions/article-2966766/Savers-using-pension-freedom-warned-pay-emergency-tax.html

Apparently HMRC will tax anything you withdraw after the 25% tax free sum at 40% tax and you will have to reclaim the tax back.

Edited March 25, 2015 by Faz

[Liquorice]

Another example:

Assuming a pot of £150,000 and you have 8 years before reaching state pension age.

You want to withdraw equal amounts for the next 8 years.

That is £18,750 per year.

The tax free lump sum of 25% equates to £37,500

First year................£18,750 tax free

Second year...........£18,750 tax free (you have now used up your 25% tax free allowance)

Third year...............£18,750 taxed at 20%

Subsequent years £18,750 taxed at 20%

There are many different permutations and choices you could make, but however you choose to take the pot the fundamental rules remain.

Only the first 25% of any pot is tax free.

You will pay tax on any income above your yearly personal allowance

[Liquorice]

Funny enough I received an e-mail today from my Pension advisors, which read;

Dear Mr *******,

During the recent budget the Chancellor announced a proposal which, if it is passed, will mean that from April 2016 people may be able to exchange their lifetime annuity product for a cash lump sum. Watch our exclusive video to learn more

As the Government have yet to pass this piece of legislation, there is no action that can currently be taken, however when more information becomes available we will provide you with a further update.

James Dean, Age Partnership's Pension Income Technical Manager, discusses the recent budget proposals which, if passed, will mean that from April 2016 people may be able to exchange their lifetime annuity product for a cash lump sum

The video link if anyone's interested is; http://www.agepartnership.co.uk/pension-income/aptv/your-pension-annuity-update/&link=3

[alfieconn]

You can take 25% of your total pension pot tax free.

Thereafter each year you can withdraw up to the personal allowance tax free.

Quote

Basicly from reading further there are 2 options :

A. You take the whole lot out and get 25% tax free.

B. You drawdown an amount as and when you need it and 25% is tax free each time

Assuming a pot of £100,000 to make it easier.

A. Yes. £25,000 tax free lump sum. £25,000 - £42, 285 taxed at 20%. Over £42,285 taxed at 40%

B. No. The tax free amount is 25% of the total pot. Once you've drawn £25,000 the rest is taxable.

@Chivas.

If you have a pot of over £100K, and having 10/12 years before you receive a state pension, personally I'd take the 25% tax free sum the first year, then every year thereafter the maximum your personal allowance will allow before paying tax. (£10,600 from April)

That will allow you to draw the complete pot tax free before you start receiving state pension.

That assumes that will be your only income.

You can withdraw amounts however you wish, but only the first 25% of the total pot is tax free.

Bare in mind that unless you invest or save those funds, then at age 65/67 you'll only receive the state pension

alfiecon, added a very useful link about the tax implications that I recommend you read; http://www.thisismoney.co.uk/money/pensions/article-2966766/Savers-using-pension-freedom-warned-pay-emergency-tax.html

Apparently HMRC will tax anything you withdraw after the 25% tax free sum at 40% tax and you will have to reclaim the tax back.

Not sure your correct on that one, so are you saying that if you only take 10,000 tax free in the first year and by year 5 the pot is at 150,000 you still can only take another 15,000 tax free ? so in other words the tax free lump sum is fixed even if the pot increases !

Edited March 26, 2015 by alfieconn

[Chivas]

Another example:

Assuming a pot of £150,000 and you have 8 years before reaching state pension age.

You want to withdraw equal amounts for the next 8 years.

That is £18,750 per year.

The tax free lump sum of 25% equates to £37,500

First year................£18,750 tax free

Second year...........£18,750 tax free (you have now used up your 25% tax free allowance)

Third year...............£18,750 taxed at 20%

Subsequent years £18,750 taxed at 20%

There are many different permutations and choices you could make, but however you choose to take the pot the fundamental rules remain.

Only the first 25% of any pot is tax free.

You will pay tax on any income above your yearly personal allowance

I still cant believe some of you Guys are missing the very obvious.......

Using the example shown you're making the mother of all assumptions.............In this case that the residue invested doesnt move a single Cent up or down

Further more I spoke to Life Company yesterday afternoon who confirmed unlimited withdrawals are vaild and each withdrawal is 25% tax free no matter how many times and on what increasing balance.

Only concern they had was the taxation situation mentioned above as still havent been told what tax rate to withhold

Edited.....apologies to above Poster who has said the same. I quoted and answered without reading right down

Edited March 26, 2015 by Chivas

[evadgib]

Recent press releases from HMG:

Is your bank giving you the best deal? Find out using new online comparison tool

New Deputy Pensions Ombudsman appointed

Five new providers join flagship identity verification service

Treasury boost for aged charities

This one is in reply to a FOI request re pensionable age changes:

Proposed changes to the State Pension age

Edited March 26, 2015 by evadgib

[Liquorice]

alfieconn, on 26 Mar 2015 - 10:00, said:

Faz, on 26 Mar 2015 - 01:26, said:

You can take 25% of your total pension pot tax free.

Thereafter each year you can withdraw up to the personal allowance tax free.

QuoteQuote

Basicly from reading further there are 2 options :

A. You take the whole lot out and get 25% tax free.

B. You drawdown an amount as and when you need it and 25% is tax free each time

Assuming a pot of £100,000 to make it easier.

A. Yes. £25,000 tax free lump sum. £25,000 - £42, 285 taxed at 20%. Over £42,285 taxed at 40%

B. No. The tax free amount is 25% of the total pot. Once you've drawn £25,000 the rest is taxable.

@Chivas.

If you have a pot of over £100K, and having 10/12 years before you receive a state pension, personally I'd take the 25% tax free sum the first year, then every year thereafter the maximum your personal allowance will allow before paying tax. (£10,600 from April)

That will allow you to draw the complete pot tax free before you start receiving state pension.

That assumes that will be your only income.

You can withdraw amounts however you wish, but only the first 25% of the total pot is tax free.

Bare in mind that unless you invest or save those funds, then at age 65/67 you'll only receive the state pension

alfiecon, added a very useful link about the tax implications that I recommend you read; http://www.thisismoney.co.uk/money/pensions/article-2966766/Savers-using-pension-freedom-warned-pay-emergency-tax.html

Apparently HMRC will tax anything you withdraw after the 25% tax free sum at 40% tax and you will have to reclaim the tax back.

Not sure your correct on that one, so are you saying that if you only take 10,000 tax free in the first year and by year 5 the pot is at 150,000 you still can only take another 15,000 tax free ? so in other words the tax free lump sum is fixed even if the pot increases !

How you decide to extract your pot is between you and your Pension provider.

I said 25% of the fund is tax free. If your Pension provider allows you to take a £150,000 pot at £15,000 per annum, I suspect they will offer alternatives to how the tax free sum is taken. All at the beginning or spread over the period of the agreed payments. If it accrues interest over the next 10 years, then that should also be paid as the first 25% tax free, but that's up to the Pension provider to set the terms and conditions.

If there going to manage your assets expect some charges.

[siampolee]

As a slight diversion from current matters, does anyone here have a working email address for the TPP international queries office @dwp.gsi.gov.uk .

The address I show above is not accepting mail even when entered as a cut and paste format [email protected]

That cut and paste comes from a recent email reply( 6 weeks ago) to me concerning a recent inquiry I made.

[Liquorice]

siampolee, on 27 Mar 2015 - 10:50, said:

As a slight diversion from current matters, does anyone here have a working email address for the TPP international queries office @dwp.gsi.gov.uk .

The address I show above is not accepting mail even when entered as a cut and paste format [email protected]

That cut and paste comes from a recent email reply( 6 weeks ago) to me concerning a recent inquiry I made.

International Pension Centre

[email protected]

[siampolee]

Faz.

Many thanks for your reply,Greatly appreciated.

[Liquorice]

siampolee, on 28 Mar 2015 - 07:58, said:

Faz.

Many thanks for your reply,Greatly appreciated.

[evadgib]

Latest from bbc:

http://www.bbc.com/news/uk-32110859

Edited March 30, 2015 by evadgib

[billd766]

I found this information about pensions on the BBC news website this morning.

http://www.bbc.com/news/business-32087038

[sandyf]

Pension changes 2015

• People aged 55 and over can withdraw any amount from a Defined Contribution (DC) scheme, subject to income tax
• Tax changes make it easier to pass pension savings on to descendants
• Many people with Defined Benefits (DB) schemes will be allowed to transfer to DC plans
• All retirees will have access to free guidance from the government's Pension Wise service
• Existing annuity holders are unaffected for the time being, but there are plans for them to be able to sell their annuity

http://www.bbc.com/news/business-32188982

[Chivas]

I just Posted this in the dedicated thread but I thought worthwhile to post here likewise so copy and paste.....

Live Update....

First day of New Rules and Standard Life had Online Applications already up and running........

Took me 5 minutes to complete online forms from registered user site, ticking off boxes and nothing more wanted than Bank Account Details and Full Name...........although National Insurance number was on "list" of requirements, it also stated it wasn't needed in all cases......It wasn't in mine

Very small Pot and took in Full........They are taking obviously tax on the amount not covered by the tax free allowance and are taxing at basic rate

I know reading other Posts here and on other threads it was anticipated that maybe higher rate tax would be paid (and then reclaimed) but not so with Standard Life or at least with my application.

Of course first day of new tax year so full allowance was available anyway

It was really very simple to do and whilst I took the lot the application was clear in that you could enter xyz amounts etc

Payment to completion within 10 days according to Final Page after completing Online Forms

Impressed with smoothness of application....