It’s risky – but this pension trick could double your tax-free lump sum
Analysis produced by Tideway is referenced in the Telegraph.
For many the tax-free “lump sum” is the major selling point of a pension. In most cases, savers can withdraw 25pc of their pension without paying any tax. This lump sum is often used at the outset of retirement to pay off a mortgage or help children onto the property ladder.
But you can obtain far larger sums – even as much as twice the original offer – depending on which type of pension you make the withdrawal from…
…Analysis produced by Tideway, a specialist pension transfer advice firm, also highlights how those needing to take cash earlier lose out.
Final salary schemes normally apply discounts for taking a pension before the “normal” retirement age. Tideway’s James Baxter explained how retiring just five years early, at 55 instead of 60, could knock off 20pc of the starting pension. This would lower the amount of tax-free cash able to be withdrawn even further.
Read the whole article on the Telegraph website by following the link below.