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bigduckontax, Accountant
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I will retire in June this year at the age of 63. Between April

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I will retire in June this year at the age of 63. Between April and June, I expect to earn around £20,000 gross. After I retire, I expect to have Defined Benefit pensions of £750, £27,500 and £10,700 gross per annum plus I have a Defined Contribution Personal Pension currently valued at £180,000.
The first two DB pensions are already in payment and previous lump sums have been calculated at 46.02% of my Standard Lifetime Allowance. I have the option with the 3rd DB pension to take £10,600 pa, or to take a lump sum of £57,000 and a reduced annual pension of £7,500. I would like to take the whole DC pension in cash in order to part-fund the purchase of a property abroad. I do not wish to purchase any annuity.
What are my best options lump sum/s. I am prepared to accept a higher tax bill in order to gain full control of the cash.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
, I'm Keith and happy to help you with your question.
You cannot alter the DB pensions once they are in issue unless the their terms and conditions so allow.
From April 2015 you will be able to access your whole pension pot, excluding DB items already in issue, but the lump sum released will be taxed at your marginal rate of tax.
Customer: replied 2 years ago.
I knew that. Is there any way of minimising the amount of tax payable on the amount that I have invested in the DC pension?
Expert:  bigduckontax replied 2 years ago.
Unfortunately not; the 2015 Budget which opened the door to liberating pension pots also exposed such liberation to taxation at marginal rates. You have the 25% tax free on maturity of most schemes, but that is the best you can get. If you reduce the lump sum you increase your exposure to the pension when in issue.
It's a real heads the taxman wins, tails you loose situation. What you receive on one had you pay back with the other. It's a classic example of Benjamin Franklin's dictum that in life there are but two certainties, death and taxes.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3385
Experience: FCCA FCMA CGMA ACIS
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Customer: replied 2 years ago.
OK, thanks . No more questions.
Expert:  bigduckontax replied 2 years ago.

Delighted to have been of assistance. Thank you support.

I should have mentioned that Defined Benefit Pension Schemes are outside the parameters of the new regime announced in the 2015 Budget. The only latitude therein, if any, is in the terms and conditions of the relevant schemes. These will tend to be a tad restrictive, to say the least.

Expert:  bigduckontax replied 2 years ago.
I have to draw your attention to an error in my last post. Whilst DB schemes where the pension is already in issue cannot be changed save within the parameters of their own rules, if you have some from which you are not yet drawing a pension, then from April this year you will be able to access their pension pots, but at the penalty of being taxed at your marginal rates which could mean taxation at 40% or even 45%, losing personal allowance progressively if you go over 100K.
Please accept my apologies mistake. I must be getting old!

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