Pension lump sums - two pots

[TapeDispenser]

I'm really struggling to find the tax rules on lump sums where you have more than one pot.

I have 2 private pensions. If I took the full 25% as a lump sum, I can take £188k from one and £110k from the other.

What I cannot work out is if I can only take £268k tax free or if the £268k limit only applies per pot?

Does anyone know?

I think it's £268.per person so in total regardless of how many pots you've split pension over.

Yes it's total per person not per pot

Would this service be any help?:

www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

Total but check here for more details

One of my schemes is DB so PensionsWise can't help. I could call my scheme but they often have long wait times then tell you you need to take independent financial advice.

But thanks for replying.

It does look from PPs as if it's the total.

I had 3 different pension policies, I was able to take 25% tax free from each policy. I had to fill in forms showing all details of policies, 2 were with same company so were combined.

Ah, that's more complicated then.
I had a DB and a DC and was limited to 25% of the total 'value' which was calculated as my annual DB pension X a factor, I think it was 20, + my DC pot. It was in the scheme rules. I was able to take all my TFLS from my DC, rather than reducing my DB ongoing payment (my preference as I didn't have an immediate need for the cash).

It's true you can take 25% from each, unless you hit the £268k limit as OP has which is the total tax free amount you are allowed.

Jesus that’s a decent pension fair play OP 👏

Definitely £268k in total.

My advice would be to take the maximum from the DB scheme & the rest from DC. In that way you can manage it better.

Also with pensions if that size I'm surprised you don't have any protection of the TFC.

Haha, so the opposite of what I did?!

Why do you say 'so you can manage it better'?

My DB scheme has a guaranteed annual inflation linked increase (though mine is capped). That means I know that part of my pension will rise without me having to worry about investing for growth, timing of withdrawal etc. I have that with the TFLS I took from my DC and am dripping it into ISAs to minimise income tax on withdrawal. This seems like a sensible option to me.

what I was referring to is the order in which you take your benefits (in this case the TFC). If you have a limit of £268k & in the OP's case took the max TFC from the DC scheme (which I was assuming was £110k but I may be mistaken) then if the DB scheme could only pay £188k as TFC then the OP would have an excess tax charge on £30k. If doing the other way round then the max TFC can come from the DB scheme and then the OP can decide whether to limit the TFC from the DC scheme to £80k or take more and pay tax on it.

But all this is assuming the DB benefits can't be altered. Many can, but usually by having a greater TFLS and a reduced pension, rather than a greater pension and less TFC.

In essence, a DC under a Flexi-Access Drawdown plan does what it says on the tin. Its flexible. most DB schemes aren't and can only pay out once. On retirement.