old section 226 pension (retirement annuity cointract)

[oddjobbob]

Can anyone help?

 

 

I am very lucky in that whilst browsing the news recently I saw about 2015 pension changes and that from next April (I will be 58) I can take any pension as a lump sum and not buy an annuity unless I want to.

 

 

 

I had forgotten all about some pensions I started in the 1970's and have had a good dig around and am very happy that I have a 'forgotten'; pension pot of over £90,000 in two RAC's.

 

 

I do not need to generate an income for my old age as I have some property investments which provide an adequate living.

 

 

My questions are

 

 

Will I be able to do what I think I can do even though RACs were originally set to a retirement age of 60?

 

 

From what I've seen 25% of any pot is tax free and the balance is at marginal tax rate - mine is currently 20% - but let's say my income at present is £25000, if I took EVERYTHING out at once then I could get £22500 tax free and pay 20% tax on the £67500? Or would I need to draw it out bit by bit to keep it under the 40% tax rate in any one year?

 

 

I'm sure these questions will bring up others I haven't considered, and hopefully this is in the correct part of the site, if not, mods please move!

 

 

Thanks in advance for all help.

 

 

Bob

[honeybee13]

Hello Bob.

 

Yes I think it's the right part of CAG.

 

I think you're right in saying that if you take out cash it needs to be an amount that doesn't move you into 40% tax. My understanding anyway.

 

What you could do on Monday is to ring the Pensions Advice Service [TPAS] who are good and will advise you for free. Their website is worth a browse too, it has some good information.

 

http://www.pensionsadvisoryservice.org.uk/

 

HB

[ericsbrother]

25% tax free and then your normal tax rate on the rest. If you release some of the money you can do the same again next year, 25% of the total taken is tax free and then your normal tax rate on the rest.

I like this new schemen because even if you pay tax on a sunbstantial amount you have had tax and NI relief on it when you paid it into the scheme so the most you will pay in tax is less thanit would have been if it was salary all those years before.