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I look forward to your reply
Thank you for your prompt reply, Would the pension provider take the tax liability away from the £46000 and pay me the net amount.
The reason I ask is I have been told that pension providers are taking either 45% or 55% and it is then upto me to sort out any problems or overpayments with HMRC at the end of the Tax year
The 55% tax rate will only apply to those who are aged under 55 and who are cashing in their pension early so that should not apply to you..The 45% tax rate is the top rate of tax for those with incomes in excess of £150,000 per annum.I've read conflicting articles about this but my understanding is that the provider should ask what your other income will be and use that to calculate the tax on the pension fund withdrawal. According to some articles, it may be a problem for those who don't have a tax code. As you only receive state pension, you won't have been issued with a tax code.If your provider simply deducts a straight 40% or 45%, you can make a claim for an in year tax repayment on a form P50Z instead of waiting to the end of the tax year to get the excess tax back. It would be worth a phone call to your provider to find out what they intend to do as it would not surprise me if different companies adopted different policies.