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Lump Sum

Discussion in 'Retirement' started by misstippytoes, Oct 6, 2015.

  1. misstippytoes

    misstippytoes New commenter

    My partner's getting a little concerned (he isn't a teacher) as he's been told that the lump sum from his private pension will be taxed. Does anybody out there know if this is true and how he can avoid it?
    Many thanks
  2. Morninglover

    Morninglover Star commenter

    I can't answer your partner's question, but I can confirm (in case anyone is worried) that my teachers' lump sum - taken a couple of years ago - wasn't taxed.

    Now I took the maximum lump sum allowed under the TPS scheme....What I have heard is that - under recent government changes to private pensions - those people (who won't be teachers, BTW) who choose to take all their pension out and make their own arrangements (rather than buying an annuity) are taxed on this.

    Like so many things in life, the government's promises weren't as good as they sounded! What a surprise!

    Tell your partner to be careful - get good advice - and don't be scammed by many of the conmen who have crawled out of the woodwork after the recent pension reforms...
  3. lizziescat

    lizziescat Star commenter

    Where did the information re taxing your partner's lump sum come from?
  4. jacob

    jacob Lead commenter

    I have taken two private pensions under the new rules that came in on April 6. In both cases I took the whole lot as a "lump sum" via some fancy wording. 25% was tax free but the rest subject to some magic formula that I did not understand that took too much tax. I will, however, get the extra back at the end of this tax year. Why the hell they do it in this stupid way I have no idea, but it means I should have a nice little rebate sometime after April. I think the main rule is that a lump sum of up to 25% of the pot is tax free.
  5. Guest

    Guest Guest

    I do not believe the government will change the tax free 25% lump sum policy in the near future. It would be a sure vote loser.

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