Good little article Tax you pay on your pension - Pension Wise
You can either take 25% tax free in one hit or take out chunks of cash with 25% of each chunk being tax free.
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Reply to: Pensions and drawdown
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Previously on "Pensions and drawdown"
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Originally posted by Peoplesoft bloke View PostIt's a one-off deal - I am also pretty sure it invokes a much lower annual contribution limit too as soon as you do it - obvs HMRC have spotted that otherwise you could just keep paying yourself via the pension indefinitely.
Like you said, lump it all in take it out next year.
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Originally posted by WordIsBond View PostWhy sell yourself short with the "when" restriction?
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Originally posted by psychocandy View PostApart from less in your pension fund going forward, does it then continue as normal? It is a one-off deal this withdrawal or can you withdraw 25% of the total in the future too?
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My understand is that 25% of the entire pension pot can be drawn tax free. So if you have 200k @ 55 and take 25%, then at 65 you can draw 25% of everything above 150k and not pay tax on it. As stated above, probably best to check with an SME.
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Originally posted by psychocandy View PostOK I'm a bit stupid when it comes to pensions....
I've got a few left over permie ones. Most of it amalgamated into a SIPP.
I also currently work (for last few years) via umbrella and I pile a bit into their scheme. Its good because its a company scheme so any contrib go in before employer NI as well.
Anyway, few years I'm 55.
Am I right I can take 25% out tax free at this point? And keep working?
Apart from less in your pension fund going forward, does it then continue as normal? It is a one-off deal this withdrawal or can you withdraw 25% of the total in the future too?
OK, I know there are limits to what you can contribute but whats stopping you paying in the max for the few months before you're 55 knowing that in a bit you can have 25% of it back tax free?
If you can do this seems a no brainer. With employer NI, employee NI, upper rate tax you're losing more than half anyway....
Don't forget to consider a draw down scheme, which has been pretty beneficial for me.
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Originally posted by psychocandy View PostOK I'm a bit stupid when it comes to pensions....
Originally posted by psychocandy View PostI also currently work (for last few years) via umbrella and I pile a bit into their scheme. Its good because its a company scheme so any contrib go in before employer NI as well.
Originally posted by psychocandy View PostAnyway, few years I'm 55.
Am I right I can take 25% out tax free at this point? And keep working?
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Pensions and drawdown
OK I'm a bit stupid when it comes to pensions....
I've got a few left over permie ones. Most of it amalgamated into a SIPP.
I also currently work (for last few years) via umbrella and I pile a bit into their scheme. Its good because its a company scheme so any contrib go in before employer NI as well.
Anyway, few years I'm 55.
Am I right I can take 25% out tax free at this point? And keep working?
Apart from less in your pension fund going forward, does it then continue as normal? It is a one-off deal this withdrawal or can you withdraw 25% of the total in the future too?
OK, I know there are limits to what you can contribute but whats stopping you paying in the max for the few months before you're 55 knowing that in a bit you can have 25% of it back tax free?
If you can do this seems a no brainer. With employer NI, employee NI, upper rate tax you're losing more than half anyway....Tags: None
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