pension question

[kowasi]

Take the max tax free 

[TOPGUN749]

15 hours ago, Bigbob said:

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 

I am told whether you take a 25% lump sum or not 25% is still tax free as a part of the pension.

[Dougy]

3 minutes ago, TOPGUN749 said:

I am told whether you take a 25% lump sum or not 25% is still tax free as a part of the pension.

Yes 25% is tax free, if for example you were to take 50% of your pension then the additional 25% would be taxable. 

BUT if you are not careful you could end up paying more unless you get advice. All pension providers have people that can offer free advice, you get what you pay for remember, look for pension advisors they should all be regulated by the Financial Conduct Authority FCA. This is not a free service although some may give a free consultation.  

As you can see from the replies each case is different, advice for person A will be different for that given to person B and so on. Any pension payments received that gives you an income of over your tax allowance £12,570.00)will be taxable, so if you can it would be beneficial to reduce the amount received over this figure to reduce the amount the taxman gets, a financial advisor will help avoid paying more tax than you would want to. 

[TOPGUN749]

I gave up work at 63,became a non tax payer then until recently,so I took a couple of small pensions in full as lump sums and was able to reclaim the tax in full. 

[Dougy]

55 minutes ago, TOPGUN749 said:

I gave up work at 63,became a non tax payer then until recently,so I took a couple of small pensions in full as lump sums and was able to reclaim the tax in full. 

That is similar to what I have done, though I combined 3 small pension and taken 25% plus a draw down for 3 years until state pension kicks in. But not touching any large company pension until probably end if this year. I suppose im lucky Its giving me just a bit lower than what was my previous salary, which was tooo much for what I did 😆 and my outgoings are B all. 

I did did invest heavily in Fed 210 and CCI br LR primers which have tripled in price should I need extra cash I can make a mint selling those. 

[Weihrauch17]

On 02/03/2025 at 11:06, Dougy said:

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. 

A married couple have 500k each to leave before IHT kicks in if the main property is left to their offspring.  If one dies the 500k allowance is passed to the survivor.

Edited 8 hours ago by Weihrauch17