Author Topic: Taking your pension pot as a lump sum  (Read 2100 times)

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The Prophet

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Taking your pension pot as a lump sum
« on: February 11, 2013, 10:23:12 am »
Anyone with a pension can take 25% of the pension pot tax-free, as soon as they reach 55.
There is no need or requirement to convert the other 75% to an annuity at the same time.
The balance can remain invested until annuity rates are more favourable or your circumstances change.

The news is even better for those who have what are known as "trivial" pensions.
They can take the whole fund value as a cash lump sum as soon as they reach 60, provided that the total value of all pension funds you have does not exceed the £18,000 limit.

A further new change introduced in April 2012, allows you to take up to two small pensions as a lump sum, even when the total value of your pension funds exceed the £18,000 current limit. 
To do this you must again be 60 or over and each pension fund must be worth less than £2000.
Again the first 25% of the fund is tax-free with the remainder taxed by the pension company.

For more information see pensionadvisoryservice.org.uk