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Got my final paperwork to send back in.
I have been over it several times and am happy with how I have understood it all apart from the 'Cash Balance Fund' side of things-
1) option 2 - take all of the CBF pot as taxable 8 weeks after retirement date with 25% tax free/75%taxable.
2) option 2A-states take £xxxx of CBF then tax is payable on excess pot again 8 weeks after.
I can't work out which is more tax efficient or basically worth more to me?
Thanks in advance.
Got my final paperwork to send back in.
I have been over it several times and am happy with how I have understood it all apart from the 'Cash Balance Fund' side of things-
1) option 2 - take all of the CBF pot as taxable 8 weeks after retirement date with 25% tax free/75%taxable.
2) option 2A-states take £xxxx of CBF then tax is payable on excess pot again 8 weeks after.
I can't work out which is more tax efficient or basically worth more to me?
Thanks in advance.
I don't think anyone else can answer that? Assuming option 2 is 100% of the pot that would give you the biggest tax free amount. Assuming 2A is a lower amount the same perentage will give you less money BUT if the reduction is funding something else tax free then that may be a better result.
Option 2a could be the most tax efficient but could result in a lower total lump sum but a higher pension per month, The CBF would be used to fund the lump sum (25% OF YOUR TOTAL PENSION POT) tax free, with no reduction of monthly pension. Any excess CBF above the 25% of the total pension pot value (Basically your annual pension x 20 + CBF + any AVCs all divided by 100X25) This is assuming section C member.
If your personal circumstances mean you need the maximum lump sum now then the first option would probably pay more initially. It depends how much lump sum if any you are going to take with your pension (Again section C)
Post the ball park figures here and you would get better answers, also which section and how long your service would help, along with is it just the NRA60 or both NRA60 and NRA65
Option 2a could be the most tax efficient but could result in a lower total lump sum but a higher pension per month, The CBF would be used to fund the lump sum (25% OF YOUR TOTAL PENSION POT) tax free, with no reduction of monthly pension. Any excess CBF above the 25% of the total pension pot value (Basically your annual pension x 20 + CBF + any AVCs all divided by 100X25) This is assuming section C member.
If your personal circumstances mean you need the maximum lump sum now then the first option would probably pay more initially. It depends how much lump sum if any you are going to take with your pension (Again section C)
Post the ball park figures here and you would get better answers, also which section and how long your service would help, along with is it just the NRA60 or both NRA60 and NRA65
....but don't forget that the CBF is primarily an NRA65 benefit. That's a frustration for me as my pot is bigger than my NRA65 LS and I cant use the rest to fund NRA60 LS.
