SMALL PENSION POTS

Many people have built up small pension pots from one employment or another or from one pension savings strategy to another. Up to now these were difficult to deal with at retirement because of their small size. The Government has seen some sense in this regard and now each individual aged 60 or over can take up to two small pension pots (each no more than
£2000) all as cash. 25% of the pot can be taken as tax-free cash and the remaining cash will be taxed as if it had been earned in the year that you take the money. Those of you who like solving problems will probably have immediately realised that if you had one pot worth £4,000, that you could split it in two to get the required £2000 size.