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Pension Lump Sum

Royal Mail pension news and discussion.Please note the advise given in this forum is unofficial, please use the links we have for a more detailed response or see an independent financial adviser.
Postmanpat25
Posts: 1
Joined: 05 Jun 2019, 18:07
Gender: Male

Pension Lump Sum

Post by Postmanpat25 »

A bit confused, is the lump sum payment totally tax free??
Read that only 25% is tax free!!
Help please
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itinerant
Posts: 156
Joined: 16 Sep 2017, 17:54
Gender: Male

?

Post by itinerant »

in general terms - you can take 25% of a pension pot as a tax free lump sum and this will not affect your personal tax allowance when you take it - the remainder of the pot is then used for some form of pension income depending on the scheme type (DB pension income, DC Drawdown, DC Annuity, DC Cash etc) - this pension income will be taxable once you go over your personal allowance.

https://www.gov.uk/tax-on-pension/tax-free
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