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Need advice regarding tax on withdrawing pension pot

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  • Need advice regarding tax on withdrawing pension pot

    Iím 57 have been unemployed for three and a half years and have income based jsa and housing benefit. I share a rented house with my ex partner. We have to move quickly (long story) and have poor credit a 6 yr old child and pets so itís hard finding somewhere.

    Out of the blue, this week, I have discovered a pension pot of £55,120 I had contracted out of serps decades ago and lost the documents. The company found me and have sent a statement.

    I have decided to use part of it to pay a years rent up front so we can move and also settle some outstanding stuff. I know I can take 25% out tax free.

    The pension is with One Family and they have advised that with this pot I canít just take some out, I have to take it all so it looks like I have to either transfer it and take a draw down from the new policy or take it all out , use what I need and put the rest in an ISA or something.

    My question is about timescales and tax. As I need the money quickly ( we have to be out of here by November) there appears to be insufficient time to get advice and follow the normal procedure to transfer (j spoken I a free pension adviser today who said the process could take 5-6 weeks)
    but if I take the whole lump sum of £55120 out I will pay emergency tax which could be 17£k which would be heartbreaking. I know an independent financial advisor is a good idea but I simply donít have the money to pay one.

    I havenít worked since January ( I did 10 hrs a week for 2 months so my jsa claim remained live) so as I understand it have my full allowance as a single woman.

    What can I best do?
    Tags: None

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