CMS and Pensions

[EVliving]

Good evening,

My ex pays CMS every month. However they are due to retire. They have a DC pension pot, if they decide pull their 25% tax free pot and live on that instead of drawing a taxable income will the CMS payment now become zero as they have no income.

It's just a worry for me.

Anyone have any information.

It will be based off what they draw as an income but if they have capital over £32k they will assume an 8% return on the excess over £32k. Deliberate refusal to take a pension may give rise to a variation application too.

What's a DC pension?

Thanks, however what's stops them drawing down say £30k of tax free cash a year only, so the 8% won't apply. Until the children are past CMS age.

Thanks again.

It is a money pot pension scheme, where you build up cash over the years.

This was an interesting read.

https://www.dad.info/forum/child-maintenance/child-support-and-tax-free-pension-lump-sums/#:~:text=It's%20quite%20common%20for%20people,in%20the%20child%20maintenance%20calculation.

Defined Contribution pension. So if you work you'll be paying in (I hope) as will (in most cases) your employer. There are minimum contribution amounts but of course it's best to contribute as much as you can - pays for your retirement given a) state pension is peanuts and b) state pension is unavailable until your near 70s, whilst a DC can be taken at 57.