pension question

[jeffgg]

25% Tax free lump sum. If you have two pensions both from previous employers can i take the 25% from both pensions cheers Jeff

[Weihrauch17]

Yes but don't do it if you don't need to as you are lessening the pot to give you returns.  I took 12% to pay off my mortgage and give my daughter a house deposit and legal fees.  The rest is needed to give me a monthly return.

[Charliedog]

Take the max tax free, it's a no brainer, you will likely get taxed on the rest of it?

[Weihrauch17]

1 minute ago, Charliedog said:

Take the max tax free, it's a no brainer, you will likely get taxed on the rest of it?

If you want a return from your pot that is extremely bad advice.

[jeffgg]

Thanks just was not certain if i could  take both cheers

48 minutes ago, Weihrauch17 said:

Yes but don't do it if you don't need to as you are lessening the pot to give you returns.  I took 12% to pay off my mortgage and give my daughter a house deposit and legal fees.  The rest is needed to give me a monthly return.

Not made a dicision yet as i had totally forgoten about them 

[aldivalloch]

I very rarely post on here, but, having had to consider the same choices as you're facing, here are my thoughts.

I say this with all due respect to others who've responded with a genuine desire to give good advice:-

Pigeon Watch is a shooting forum! What you need is proper, professional, independent financial advice from someone who will take full account of your circumstances.

You will almost certainly have to pay for it - and it will be money well spent.

[Weihrauch17]

2 minutes ago, aldivalloch said:

I very rarely post on here, but, having had to consider the same choices as you're facing, here are my thoughts.

I say this with all due respect to others who've responded with a genuine desire to give good advice:-

Pigeon Watch is a shooting forum! What you need is proper, professional, independent financial advice from someone who will take full account of your circumstances.

You will almost certainly have to pay for it - and it will be money well spent.

Very good advice, I i took it and acted accordingly.  The 25% is obviously appealing but if you need a pot for a return ill advised.

[jeffgg]

43 minutes ago, aldivalloch said:

I very rarely post on here, but, having had to consider the same choices as you're facing, here are my thoughts.

I say this with all due respect to others who've responded with a genuine desire to give good advice:-

Pigeon Watch is a shooting forum! What you need is proper, professional, independent financial advice from someone who will take full account of your circumstances.

You will almost certainly have to pay for it - and it will be money well spent.

It was not financial advice i was asking for it was just about the 25% and if it was for one or more pensions 

[Old Boggy]

Once you have decided to take or not to take the 25% tax free, don’t forget if arranging an annuity , to inform your independent financial advisor of any medication that you are on and any medical condition that could shorten your life expectancy. Any projected life expectancy shortening could and probably would increase your projected monthly pension.

No doubt your IFA would request this information anyway before investigating the market for the best deal.

OB

[Smokersmith]

6 hours ago, jeffgg said:

It was not financial advice i was asking for it was just about the 25% and if it was for one or more pensions 

It’s 25% of your total pot.

And will remain available until you take it.

So you could take it all, or 5% for the next 5 years .. or leave it to grow until you need it.

Best to get advice so that you can minimise your total tax paid.

[spanj]

16 minutes ago, Smokersmith said:

It’s 25% of your total pot.

And will remain available until you take it.

So you could take it all, or 5% for the next 5 years .. or leave it to grow until you need it.

Best to get advice so that you can minimise your total tax paid.

Unless Rachel from Accounts ends the concession. She needs the money !

[TOPGUN749]

I took my 25% as a lump sum, though wasn’t much. Thought it best to have it and get a return on it while I could,I could have an extra £500 a year,but would take about 16 years to equal the lump sum in my bank,and who knows if we have 16 years left? Annuities end when we die,and most never get back the whole pot unless they live to about 100!
As I understand it you can still get a 25% portion tax free whether as a lump sum or as an annual pension. I can see Labour possibly cutting this allowance in due course,as with mortgage tax relief,winter fuel payments and more to come!

[old'un]

1 hour ago, TOPGUN749 said:

I took my 25% as a lump sum, though wasn’t much. Thought it best to have it and get a return on it while I could,I could have an extra £500 a year,but would take about 16 years to equal the lump sum in my bank,and who knows if we have 16 years left? Annuities end when we die,and most never get back the whole pot unless they live to about 100!
As I understand it you can still get a 25% portion tax free whether as a lump sum or as an annual pension. I can see Labour possibly cutting this allowance in due course,as with mortgage tax relief,winter fuel payments and more to come!

 

I agree that Labour may possibly cut this 25% allowance in the future.

This was after taking advice from a IFA.

I had 4 pension pots and moved them all to a low risk SIPP, I then took my 25% tax free lump sum, with the remaining 75% of the SIPP you have the ability to take a regular and adjustable pension income (that maybe taxable) that suits your needs and lifestyle during retirement, or you could take the remaining 75% as a lump, but obviously there will be tax implications, with a SIPP it is not tied to an annuity and the pot is always there in an emergency.

As been said seek the advice of a IFA.

[Dougy]

Speak to financial advisor. 

I retired early, and everyone has different financial requirements. 

I combined 3 smaller pensions, after the end of the financial year I will take 25% lump sum and a drawdown for 3 years when the state pension kicks in. I will then look at taking my private pension. 

Alot depends on age, health and what you can afford to do. Don't forget when you snuff it most of your private pension is consumed by the government. 

[RCB56]

Simple answer to your question 

            YES

[Dougy]

A good FA will help you avoid paying additional tax. Don't forget any additional income over your tax allowance will be taxed. 

[Charliedog]

22 hours ago, Weihrauch17 said:

If you want a return from your pot that is extremely bad advice.

It's really not but each to their own

[Dougy]

5 minutes ago, Charliedog said:

It's really not but each to their own

Exactly, pensions are worked out at a life expectation if 21 years from date of retirement age. So plan on popping your clogs at 86-88. If you have a small pot of 15k that will give you £714 P/A. That's your Christmas dinner sorted then !!!

You have options like 25% lump sum and draw down over X years and have a decent amount to spend while your fit enough to enjoy hols etc. 

Or don't touch your money and leave it behind for someone else to enjoy. 

I'm going out with what I came in with. 👍

nowt. 

[Weihrauch17]

21 minutes ago, Dougy said:

Exactly, pensions are worked out at a life expectation if 21 years from date of retirement age. So plan on popping your clogs at 86-88. If you have a small pot of 15k that will give you £714 P/A. That's your Christmas dinner sorted then !!!

You have options like 25% lump sum and draw down over X years and have a decent amount to spend while your fit enough to enjoy hols etc. 

Or don't touch your money and leave it behind for someone else to enjoy. 

I'm going out with what I came in with. 👍

nowt. 

It all depends on circumstance.  If you need say £1500 a month from a medium risk SIPP and your whole pot might just return that @ 6% per annum average then taking 25% out will scupper that totally.  Blanket advice of it being a no brainer is simply wrong, I have been through the process with two different financial advisers and needed to leave enough in the fund to give the return I needed so I didn't take the 25%.  If you have millions in a pot then yes take the 25%.

[Bigbob]

Its a no brainer i took the biggest lump sum and the smaller pension  , As you would need to live to be 95 to get the same amount from a large pension payment And you got your lump sum earning or doing what you want with it 

[Weihrauch17]

18 minutes ago, Bigbob said:

Its a no brainer i took the biggest lump sum and the smaller pension  , As you would need to live to be 95 to get the same amount from a large pension payment And you got your lump sum earning or doing what you want with it 

You are obviously more knowledgeable then the two Financial Advisers I dealt with.

[Smokersmith]

8 hours ago, Bigbob said:

Its a no brainer i took the biggest lump sum and the smaller pension  , As you would need to live to be 95 to get the same amount from a large pension payment And you got your lump sum earning or doing what you want with it 

Not if you want to make smaller annual withdrawals to avoid the higher tax bracket … 

There is no one size fits all approach, which is why professional advice helps.

[old'un]

9 hours ago, Bigbob said:

Its a no brainer i took the biggest lump sum and the smaller pension  , As you would need to live to be 95 to get the same amount from a large pension payment And you got your lump sum earning or doing what you want with it 

If that fits in with your circumstances, age, health, etc. and future plans, then good luck, no one size fits all.

[jeffgg]

Thanks for all the answers and verious comments i have a lot to think about  cheers

[Bigbob]

Maybe i am fortunate only household bills to pay and with 2 x25 year pensions but as i can only earn the married mans allowance of £12,750 before tax it made sense to me to take a bigger lump sum and smaller pensions i still only see 3/4 of my second pension before tax and all my Mod pension is taxed galling when ive worked all  my life and paid into a pension to see me okay in my old age