Tax question

[WFC]

I'm coming up to 60 and havnt taken any of my pension as yet. I plan to take just my age 60 pension only when I hit 60 and leave the age 65 in the pot until I leave or hit 65. When I take my age 60 is my lump sum taxable? I know the monthly pension is as I will still be working, but if next tax year I earn the same as this year I will be well over the £50k with the lump included and will lose 40% of the lump sum to the taxman ( I have read that the 1st 25% of it is non taxable ). Cheers for any replies.

[mrcurve]

dont forget its 25% of the pension pot value, you would have to be getting a massive payout for tax to be an issue

https://www.royalmailpensionplan.co.uk/ ... r-pension/

[mrcurve]

for a/b

https://www.royalmailpensionplan.co.uk/ ... r-pension/

if you also have avc they will add them too and pay out what they can tax free any surplus rolls over to 65, guess tax will become a problem then though

[Wullie10]

I'm coming up to 60 and havnt taken any of my pension as yet. I plan to take just my age 60 pension only when I hit 60 and leave the age 65 in the pot until I leave or hit 65. When I take my age 60 is my lump sum taxable? I know the monthly pension is as I will still be working, but if next tax year I earn the same as this year I will be well over the £50k with the lump included and will lose 40% of the lump sum to the taxman ( I have read that the 1st 25% of it is non taxable ). Cheers for any replies.

I don't quite understand. Your lump sum will be tax free and you'll pay basic tax on your pension income as long as you don't do incredible amounts of overtime. It's really beyond me why people 60 or over continue to do large amounts of overtime and push themselves in to 40% tax bracket.

[freespeech]

I'm coming up to 60 and havnt taken any of my pension as yet. I plan to take just my age 60 pension only when I hit 60 and leave the age 65 in the pot until I leave or hit 65. When I take my age 60 is my lump sum taxable? I know the monthly pension is as I will still be working, but if next tax year I earn the same as this year I will be well over the £50k with the lump included and will lose 40% of the lump sum to the taxman ( I have read that the 1st 25% of it is non taxable ). Cheers for any replies.

I don't quite understand. Your lump sum will be tax free and you'll pay basic tax on your pension income as long as you don't do incredible amounts of overtime. It's really beyond me why people 60 or over continue to do large amounts of overtime and push themselves in to 40% tax bracket.

I suspect because the earnings under 40% are exactly the same....it's just the 40% upwards that are taxed at that rate so it's a personal decision on whether you want it.

[Wullie10]

Absolutely. You only pay 40% once you go over the limit. But then life gets complicated with self assessment forms on savings , other pensions even selling tat on eBay etc. My personal choice is to try and stay within the basic . More and more postman 60 plus are going to be dragged in to the 40% bracket as the the limit is frozen till April 2028. Its ridiculous.
Each to their own but I'd rather not work myself to exhaustion just to pay more tax.

[mrcurve]

if your an Artic lorry driver you may well earn 50k though

[Wullie10]

The high tax band used to be for the rich. Now its postman and teachers who are paying it. No wonder so many are giving up work.

[Jack1960]

The high tax band used to be for the rich. Now its postman and teachers who are paying it. No wonder so many are giving up work.

Yes and the tax band frozen to 2028