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cashing in pension pot

(8 Posts)
LovelyBath77 Sun 23-Oct-16 17:03:40

Is it still possible to 'cash in' your pension when you reach 55? I was reading something in the paper about it having changed, but think it might have been about selling annuities? I don't know. Thanks.

Sunseed Mon 24-Oct-16 09:15:26

Age 55 is usually the earliest age at which you can start to take benefits out of your pension savings. Check the scheme details very carefully though because you may find a penalty for accessing it earlier than the stated Scheme Retirement Age which may be 60 or 65.

It increased from age 50 to age 55 some years ago when the State Retirement Age started to rise.

Costacoffeeplease Mon 24-Oct-16 09:17:50

Yes you can, we've just done it with my husband's. You can take a lump sum in cash, 25% of each amount is tax free and the rest is taxed depending on any other earnings, so if it's a larger pot it's probably better to do it over a few tax years - that's our plan anyway

LovelyBath77 Mon 24-Oct-16 19:54:39

Ok. Yes it should be in seven years and this is also when the mortgage is paid off. I think it is 55. We do get some tax credits so guess it would be taken into account as income for that (self-employed) not sure if will be by then though, as is changing to UC.

ChessieFL Mon 24-Oct-16 19:56:44

Yes, it's the plan to allow people to sell annuities which has been scrapped. You can still draw on your pension pot from 55. As others have said, check with your provider what you will be able to do.

LovelyBath77 Mon 24-Oct-16 20:09:22

Ah, I see. Thanks.

Ta1kinpeece Mon 24-Oct-16 21:14:15

Anything you take out over the 25% will be taxed at your incremental rate and could bugger up your tax credits or UC so you need to be REALLY careful
take advice at every stage

Costacoffeeplease Mon 24-Oct-16 21:18:23

You only get 25% of each withdrawal tax free, so there will always be a tax element

We were actually way over-taxed on the withdrawal we made in the summer, and we're still waiting for the repayment sad

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