Pension Pot From 06 April

[icecreamicecream]

I have a pension with Prudential with approx.50000 pounds in the pot.will I be able to just phone them up and ask for my entire 50 grand.I sure need the money.

[icecreamicecream]

Didn't like Russell Brand before now,Im starting to agree with him.We need a revolution.So I pay in £50000 and only get back £33000.Poor show all round.I would go and cry into my beer ,but cant afford it now.

[Peter Pedant]

There are phrases left over from the Good old days

confiscatory taxation

I will tax them until the pips squeak ( Dennis Healey 1972)

social engineering and of course The Politics of Envy

[fiction-factory]

Spread it over two tax years ICIC and you will pay much less tax.
You still seem to be overlooking the tax you avoided on your income when you paid the money into the scheme. Just think of it as deferred income tax

[fiction-factory]

ICIC: " I would go and cry into my beer, but cant afford it now".

Don't forget the Chancellor has announced a 1p a pint reduction

[Peter Pedant]

// pension for my penurious old age a third will go to some non-deserving government cause //

pension taxation structure in this Kingdom of the Free is E E T
exempt exempt taxed
which means that contributions are tax exempt
consolidation/growth is tax exempt
and the pension itself is taxed

actually since Mr Brown corporation tax grab of 1997 it is
E(T) E T
and the result was - the final salary pensions all died ( as a direct result)

[New Judge]

Whilst I sympathise, icecream, it’s no more a scam than any other income tax is. You state that you paid in £50k but in fact you did not. Your contributions were enhanced by the tax relief you received. In the same way that a pension pot is really deferred income, the taxation on the benefits is simply deferred taxation. Furthermore, as has been mentioned, 25% of your pot can be drawn free of tax. Had you not paid that sum into a pension pot it would have been taxed in the usual way at the time you received it.

Nobody despises wasteful politicians more than me (see many of my previous posts whenever the issue is raised) but taxation on pension income (however it is taken) is as justified as any other income tax.

[icecreamicecream]

OH,Woopie-doo,FF...and as for PP,I think I will move to North Korea,their tax rates cant be any worse than ours.Can they?

[bhg481]

Possibly not, but you try complaining about them.

[New Judge]

Fiction's idea of spreading the sums you draw over two or more years will only work if the amount you draw pushes you into a higher tax band. If you are already paying the higher rate it will attract 40% tax however you take it.

[icecreamicecream]

Thanks for your input,NJ.It doesn't make me feel any less done by.Time to go for a half -a shandy and a box of Kleenex.

[fiction-factory]

Maybe, New Judge, maybe. I was working on the basis that ICIC probably wasn't close to being a 40% tax payer or else he'd be well aware of the 41 or 42% marginal tax rates that apply for many people.

[New Judge]

Yes of course you're right, fiction. I just thought I'd point it out to icecream. It seems he's gone down the pub now so perhaps he'll drown his sorrows!

[icecreamicecream]

Back from the pub now (hick).Is there any way I can take the £12500 this year and leave the £37500 in till next year and then next year take out 25% of the £37500 and so on year by year till I have claimed the lot without giving any to the chancellor?

[fiction-factory]

If you only ever took 25% of what was left you'd never use up all the money- there would always be 75% of the previous year's balance left.
I don't think you can keep getting 25% tax free each year but there are draw down arrangements. Maybe you would benefit from some financial advice if you are taking about such a big pot and 40% tax rates

[icecreamicecream]

Im 57 now ,FF...So if I live to say 90 I would have taken a big splodge of my dosh.

[themas]

"Back from the pub now (hick).Is there any way I can take the £12500 this year and leave the £37500 in till next year and then next year take out 25% of the £37500 and so on year by year till I have claimed the lot without giving any to the chancellor? "

NO. 25% of each bit you take is tax free; the rest is taxed at your marginal rate at the time you take it (so if taking it puts you up from 20% to 40% part os taxed at each of those rates).

As NJ has told you, you are not hard done by - you got a lot of tax relief when you made the contributions.

To answer your original question, you cannot just ring up your provider and ask for the money. Go to the pensionwise website, which explains the arrangements for people wanting to access their pots to have guidance. Also, providers vary on what they will do and on what (if any) fees they will charge to do it.

[ToraToraTora]

you'll only lose it to tax if you do it in silly non tax efficient way. The point is thay the money save is saved tax free so they are not going to let you have the whole lump tax free. You have to be a bit cuter, take the 12.5 K and take the rest monthly on draw down being careful not to breach the 40% barrier.