Wednesday 19 December 2018

A CASH LUMP SUM!

Under the new rules you can, in principle, take all of your pension fund out as cash. The downside to this option is that only 25% of what you take would be free of tax and so you could end up paying up to 45% tax on some or all of the rest that you take out as cash. If you are tempted to take large amounts out as cash, do get someone to help you crunch the numbers as to how much tax you will have to pay. Having saved the money carefully in the pension over all those years, it does not make sense to waste it now. And if you splurge now on the Ferrari, it could mean you would have little left for your future needs. So this Pension Freedom does not provide freedom from taxation, but it does allow a great deal of flexibility for managing how you take it out!





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