Body & Soul1 min ago
Private Pension Pot
Is this correct? If so, does anyone have any advice please?
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we told people to look here.
Money advice service(government website.
Heres a bit of information.
Second, yes, in theory, you can take 25% of your lump sum pension pot as a tax-free bonus. However, you'll ten have to invest the remainder in some specific pension vehicle. That could be draw-down (taking sums regularly from the capital), or an annuity (likely to be terrible value at p-resent), or simply leave it in a specific pension-focussed investment vehicle.
Bear in mind that the State pension will become increasingly under pressure, and whatever you have left after you take your 25% will have to deliver your income for the rest of your life.
I am facing similar decisions. My decision is to leave the full pot intact, while I continue to work. My pay brings in enough to pay the bills and so on. WHile I could get my hands on a substantial sum by cashing in the 25% tax-free, I' not going to do that, partly because I don't know what my circumstances will be in a few years' time when I reach State retirement age, and partly because all the rules might change in that time frame.