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Pension scheme closing - take lump sum or transfer to another scheme?

(5 Posts)
chocolateygoo Tue 25-Jun-13 20:50:29

Thanks for your messages, DH and DM agree. I still want to go spend it on 6 months somewhere with a genuine summer. Oh well, I'll guess I'll have to hope for some sunshine here instead... Bah humbug!

Notmadeofrib Tue 25-Jun-13 14:22:13

If you were ever made bankrupt that money would be safe, if you take it you are going to spend it. Transfer

specialsubject Tue 25-Jun-13 11:39:45

what unexpected said.

UnexpectedItemInShaggingArea Mon 24-Jun-13 23:18:33

Transfer. You will never build up that pension fund again.

chocolateygoo Mon 24-Jun-13 21:42:58

A company I used to work for is closing its pension scheme and has given me the option of either taking the money as a lump sum or transferring to another scheme.

If I take the lump sum (not much, <£7000), it says the first 25% is tax free and the rest is taxed on an emergency code and I have to negotiate any refund from the tax office. I think it would work out about £1K in tax, at 20% on 75% of the lump sum.

At the moment I'm self-employed and not earning very much and was expecting to be well below the personal allowance tax threshold this year. Therefore even if I take the lump sum, I might be able to reclaim most of the tax back. Is that right?

Anyway - I'm not sure what to do. The lump sum is very tempting, but I don't have any other pension savings at the moment (am in my 30s). Mumsnet please help!

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