Pension

A question about : Pension

Recieved a statement which I requested from an old employer about my pension as to what the value is. Listing ways to take the pension then on another letter Trivial Commutation Lump sum. If I take the lump sum it will discharge the trustees of all liability of the pension scheme. No mention of paying tax . Any one clarify this for me .

Best answers:

• https://www.litrg.org.uk/tax-guides/p...al-commutation
  might be of interest.
• 25% will be tax free, 75% taxed at your highest rate.
  So if its worth Ј1000, Ј250 would be tax free, Ј750 would be taxed at 20% if you would still be a basic rate taxpayer, or if it took you into the 40% band, then part or all would be taxed at 40%.
  (If your income the year you took it was at least (in this example) Ј750 below the zero rate threshold it would all be tax free)