Private pension

[heapsy]

Private pension. Read this if you have one http://www.hl.co.uk/news/2017/6/8/use-t ... Override=1" onclick="window.open(this.href);return false;

[RobertT]

The taking of a nominal sum first is a new one on me. But the over taxing of pension withdrawals and the subsequent refund has been covered many times on these forums before. It would also potentially effect our DC schemes and AVC's, depending on how we chose to take them.

Some people who cashed in their RM shares early have also had similar issues with paying a large upfront tax charge.

[benn2261]

The taking of a nominal sum first is a new one on me. But the over taxing of pension withdrawals and the subsequent refund has been covered many times on these forums before. It would also potentially effect our DC schemes and AVC's, depending on how we chose to take them.

Some people who cashed in their RM shares early have also had similar issues with paying a large upfront tax charge.

hi there I recently had a estimate on my pension I am currently 56 with 37 years in. 30 in final salary I am a mgv driver. while I'm tempted to take the nra 6o and continue to pay into the other one my question is would it really grow that much in 3 years and would I get taxed on my lump sum if it over 30k. thanks

[RobertT]

hi there I recently had a estimate on my pension I am currently 56 with 37 years in. 30 in final salary I am a mgv driver. while I'm tempted to take the nra 6o and continue to pay into the other one my question is would it really grow that much in 3 years and would I get taxed on my lump sum if it over 30k. thanks

Your pension will be reduced by 5% for each year you take it early. So if you were to take all of it at 57 for example, your NRA60 would be reduced by 15% and your NRA65 by 40%.

Your NRA60 probably wouldn’t grow by a huge amount over that 3 years, but as the FS element of that(up to 2008) is still linked to pay, whether it goes up or not will depend on if we get any pay rises or if you choose to change your hours. By leaving it until 60 it wouldn’t be reduced either. Also, if your plan is to continue working, then you’ll be paying tax on that pension aswell.
For example if your unreduced pension is £100 per week. You take that at 57 giving you £85, which is then taxed at 20% leaving £68.

It’s always a personal decision based on your own circumstances, but in general it’s not a good idea to take your pension early and continue working. The CWU have produced a video explaining why: https://www.youtube.com/watch?v=ICYgWTAD3aA" onclick="window.open(this.href);return false;

Also bear in mind that the current DB scheme is going to close on 31st March 2018 and from then on our pensions will be a lot less generous. And we don't yet know the exact terms of how our already accrued pensions will change.

The £30k tax free limit only applies to redundancy payments, so you won’t pay tax on your pension lump sum.

[benn2261]

HI ROBERT thank you for the information