![]() The lifetime allowance is the limit on the amount you can withdraw from your pension without extra tax charges. These figures apply to income tax in England, Wales and Northern Ireland in the 2022/23 tax year. 20% tax on the next £37,700 above this.The rest of your pension will be subject to normal income tax rates: This can be as a lump sum or smaller withdrawals. The first 25% of your pension pot can be taken tax-free. ![]() However, you will lose the benefit of a standard annual contribution allowance (up to £40,000), and will be subject to the Money Purchase Annual Allowance (MPAA) of £4,000.įlexi-access drawdown replaced flexible drawdown in April 2015, and since then has been available on all new drawdown products.įlexi-access allows you to withdraw you pension savings whenever you need to while keeping the rest of your pot invested. You can convert from capped drawdown into flexi-access drawdown. The limit is reviewed every three years, and then annually after you turn 75. This capped drawdown limit, set by the Government Actuary’s Department (GAD), is roughly 150% of the annual income that a basic annuity would give you. This means you are subject to a limit on the maximum amount you can take as income from your pension pot. If you went into drawdown before the wide-ranging pension reforms on 5 April 2015 and have not converted to a flexi-access drawdown, then you will be in capped drawdown.
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