Pension 25% Cash Free Lump Sum .... Last chance saloon?

**Manic** · 14 October 2024, 08:16

I'm 2 years too young, but anyhow am still putting in money so wouldn't want to be caught by the reduction in MPAA. It's not for everyone as a result but if it suits you, I would do so if in the same position.

**sadkingbilly** · 14 October 2024, 08:39

no, but i haven't been reading those articles.

**Smartie** · 14 October 2024, 09:26

Originally posted by mogga71 View Post

After reading countless articles about the Pension 25% Lump Sum being greatly reduced as part of the October Budget I must admit I have bottled it and applied for mine (via drawdown). The last straw was seeing that 2 Think Tanks are recommending that it be reduced to 100K Max. It's one of those things that once reduced will likely take ages to get restored to 25% (with max £250 ish K.) ... even when Labour get booted out of office at the next election.

Previously I had not been too worried as I was of the opinion that even if Labour did reduce it they would give advance notice .... but I am no longer so sure and didn't think it was worth the risk.

I am already anticipating a hike in Employer NI ... which of course is a disaster for us (the vast majority) caught outside .... so didn't want to be in a near suicidal state post Halloween.

Anybody else do the same?

Probably the tax hike that would affect me most. My information is that there's a high chance it will be reduced BUT clearly a lot of people will have planned based on the existing rules, so it will likely be a staged change. Perhaps reducing from the current maximum to £100k but over a period of time - say 3 to 5 years.

Can't get at mine quite yet but a change in this area may well affect when I take the lump sum.

As only perhaps 20% of people would be affected by this change, the amount of hissing vs the number of feathers plucked is thought to be fairly low and we clearly have 'the broadest shoulders', though we are working people. Hmm.

**Protagoras** · 14 October 2024, 09:32

Yep, took mine last week, but then I'd have been taking within 6 months anyway.
Presumably govt wouldn't do a 'loan charge' approach on this and tax retrospectively!

A small hike in NI wouldn't bother me too much but is anti-growth in principle, but ER NI on pension contributions ...

**Cookielove** · 14 October 2024, 09:51

Who knows what will happen with these fools in charge.

I think they will try something but it would have to be phased over a few years...it is getting harder and harder now.

The employers NI I hope is not on the cards but they refused to rule it out when specifically asked I fear that they may do that too...that would hit us all again working through umbrellas when the tax/ee NI/er NI etc is already really high...

What a mess

**Protagoras** · 14 October 2024, 11:42

Originally posted by Manic View Post

I'm 2 years too young, but anyhow am still putting in money so wouldn't want to be caught by the reduction in MPAA. It's not for everyone as a result but if it suits you, I would do so if in the same position.

Taking the 25% ONLY doesn't cause the reduced MPAA to kick-in. Unless of course they change that in the budge!

**Manic** · 14 October 2024, 13:15

Originally posted by Protagoras View Post

Taking the 25% ONLY doesn't cause the reduced MPAA to kick-in. Unless of course they change that in the budge!

Ah good to know. Although I am still 2 years too young

**Eirikur** · 15 October 2024, 08:44

Can you withdraw the 25% and put it back in immediately and have the tax deductions for paying into a private pension again?

**sadkingbilly** · 15 October 2024, 08:51

Originally posted by Eirikur View Post

Can you withdraw the 25% and put it back in immediately and have the tax deductions for paying into a private pension again?

no.

Pension 25% Cash Free Lump Sum .... Last chance saloon?