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Quick question re pension drawdown

MrOneLung
MrOneLung Posts: 27,360
in Not Sports Related

Looking to drawdown from couple of pensions

Can I take the tax free lump sum from two different pension drawdowns or is it a case of once you have drawn down from one, you can no longer get the tax free drawdown from another pension

Would be around 50k from one and 10k from another

thanks

Comments

  • Redhenry
    Redhenry Posts: 5,421
    You can draw down 25% tax free at 55
  • stockportugaladdick
    stockportugaladdick Posts: 1,200
    I have taken my 25% tax free allowance from two separate pensions, one a company pension and the other an old personal pension.
  • SuedeAdidas
    SuedeAdidas Posts: 7,955
    edited February 20
    There is a total limit to how much you can take tax free as a lump sum (from one or multiple pensions). I can’t remember the amount but I think it’s well over the 60k that you are talking about I’m sure. 
    I don’t think you’ll have any issues in that regard. 

    When you contact the pension company, they will ask you about any tax free lump sums you may already have received so that they can ensure your payment falls within the “total” tax free limit. 
  • letthegoodtimesroll
    letthegoodtimesroll Posts: 11,112
    edited February 20
    MrOneLung said:

    Looking to drawdown from couple of pensions

    Can I take the tax free lump sum from two different pension drawdowns or is it a case of once you have drawn down from one, you can no longer get the tax free drawdown from another pension

    Would be around 50k from one and 10k from another

    thanks

    I’m not a financial advisor but here’s my personal perspective on drawing money from pension pots. 

    If you’ve still got more than one pot then I’m guessing it’s likely you’ve not retired yet. Taking money and tax benefits away from your older retired self that probably won’t have any other income other than the pension you are leaving them obviously needs to be spent wisely because they will now be poorer than they would have been.

    if you’re still asking on here then I’m also guessing you haven’t got a financial advisor. It’s going to cost you but might be worthwhile anyway.
  • bobmunro
    bobmunro Posts: 21,424
    SuedeAdidas said:
    There is a total limit to how much you can take tax free as a lump sum (from one or multiple pensions). I can’t remember the amount but I think it’s well over the 60k that you are talking about I’m sure. 
    I don’t think you’ll have any issues in that regard. 

    When you contact the pension company, they will ask you about any tax free lump sums you may already have received so that they can ensure your payment falls within the “total” tax free limit. 

    The maximum total tax free amount (fine from multiple pensions if available but the total is cumulative) is currently £268,275

    Drawdown age is currently 55, rising to 57 in April 2028.




  • MrOneLung
    MrOneLung Posts: 27,360
    thanks all - have had a financial advisor re the larger one, was just mulling over taking that smaller pot as well and wasn't sure if it was a one and done job or if you could spread over multiple drawdowns as got a few pensions on the go
  • Redhenry
    Redhenry Posts: 5,421
    I have a question on draw down. if my pot is 300k and I take 10%. A year later and my pot is worth 350k and i want to take 10% again. Is the 2nd 10% withdrawal valued against the 300k or the 350k?
  • golfaddick
    golfaddick Posts: 35,248
    Redhenry said:
    I have a question on draw down. if my pot is 300k and I take 10%. A year later and my pot is worth 350k and i want to take 10% again. Is the 2nd 10% withdrawal valued against the 300k or the 350k?
    Against the current value.

    Hence why it's not always best to take the max 25% all in one go if you don't need it. Take what you need & leave the rest. One of the main benefits of Drawdown.
  • carly burn
    carly burn Posts: 19,841
    golfaddick said:
    Redhenry said:
    I have a question on draw down. if my pot is 300k and I take 10%. A year later and my pot is worth 350k and i want to take 10% again. Is the 2nd 10% withdrawal valued against the 300k or the 350k?
    Against the current value.

    Hence why it's not always best to take the max 25% all in one go if you don't need it. Take what you need & leave the rest. One of the main benefits of Drawdown.
    Never knew that.. Very useful especially if someone is continuing to work and topping up the pot.
  • Redhenry
    Redhenry Posts: 5,421
    golfaddick said:
    Redhenry said:
    I have a question on draw down. if my pot is 300k and I take 10%. A year later and my pot is worth 350k and i want to take 10% again. Is the 2nd 10% withdrawal valued against the 300k or the 350k?
    Against the current value.

    Hence why it's not always best to take the max 25% all in one go if you don't need it. Take what you need & leave the rest. One of the main benefits of Drawdown.
    Cheers Golfie

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  • golfaddick
    golfaddick Posts: 35,248
    carly burn said:
    golfaddick said:
    Redhenry said:
    I have a question on draw down. if my pot is 300k and I take 10%. A year later and my pot is worth 350k and i want to take 10% again. Is the 2nd 10% withdrawal valued against the 300k or the 350k?
    Against the current value.

    Hence why it's not always best to take the max 25% all in one go if you don't need it. Take what you need & leave the rest. One of the main benefits of Drawdown.
    Never knew that.. Very useful especially if someone is continuing to work and topping up the pot.
    👍
  • IT_Andy
    IT_Andy Posts: 481
    I would suggest contacting Pension Wise.
    Is a government service set up to help people understand the pension options available to them. It offers guidance to help empower people to make informed decisions about their pension which are best for their individual circumstances.
    https://www.pensionwise.gov.uk/
  • LargeAddick
    LargeAddick Posts: 33,468
    SuedeAdidas said:
    There is a total limit to how much you can take tax free as a lump sum (from one or multiple pensions). I can’t remember the amount but I think it’s well over the 60k that you are talking about I’m sure. 
    I don’t think you’ll have any issues in that regard. 

    When you contact the pension company, they will ask you about any tax free lump sums you may already have received so that they can ensure your payment falls within the “total” tax free limit. 
    Is there a limit? About six years ago I took 25% tax free which amounted to about 120k.
  • golfaddick
    golfaddick Posts: 35,248
    edited February 20
    LargeAddick said:
    SuedeAdidas said:
    There is a total limit to how much you can take tax free as a lump sum (from one or multiple pensions). I can’t remember the amount but I think it’s well over the 60k that you are talking about I’m sure. 
    I don’t think you’ll have any issues in that regard. 

    When you contact the pension company, they will ask you about any tax free lump sums you may already have received so that they can ensure your payment falls within the “total” tax free limit. 
    Is there a limit? About six years ago I took 25% tax free which amounted to about 120k.
    As @bobmunro said earlier.......max TFC is £268, 275. It was 25% of the then LTA of £1, 073,100. The LTA was scrapped but the TFC limit was retained.

  • Alwaysneil
    Alwaysneil Posts: 14,222
    edited February 20
    Was not aware the drawdown age increases when i am 54 and 3 months old leaving me another 2 years before I can access my pension pot. Fucking typical
  • Shag
    Shag Posts: 4,587
    Yep I’m in the same boat mate 
    I’ll be 54 and 11 months, it’s a joke
    No Idea the reason behind it either 

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