Pension Pots...

[EllieJP]

Hi! I’m after a little advice for my father who cannot talk to anyone on the phone. And sadly they won’t let me speak on his behalf...
So, my dad found out about a little pension pot he has.. totally forgot about it. Got a statement for it and it’s worth about £20K. He also had his private pension from the local government which when he decides to retire at 60. He’s entitled to take the lot tax free (I don’t know how or why this is.. but anyway) he’s not going to obviously. He will be taking a lump sum but leaving enough to pay himself month equivalent to just under the amount
You’re allowed to earn without paying tax.
Our dilemma however, is that if he was to take the forgotten about pension pot out as a lump sum. (25% tax free the rest is taxed, we’re aware that it will go down as personal income and will likely take him into the 40% tax barrier for a small amount of it) will it affect his 100% tax free amount lump sum from his local government pension? I’m sure it’s incredibly simple but when I’m dealing with money, in particular trying to help someone else with their money who doesn’t seem to be able to get any advice from anyone in person at the moment. It just makes me a little nervous. Any help would be so greatly appreciated. Thank you!

[bednobs]

why can't your father talk to anyone? is it worthwhile getting round that barrier first?
It would be foolish of anyone to give financial advice here without knowing the full picyure (and equally foolish of you to take it) :)

[woofgang]

these folk could help? https://www.moneyadviceservice.org.uk/en

[237SJ]

You might want to ask here https://www.pensionsadvisoryservice.org.uk/

[237SJ]

Or here https://www.pensionwise.gov.uk/en

[pastafreak]

What is a "local government pension"? I've never come across that phrase. Just curious.

[New Judge]

I assume it's an occupational pension paid to somebody who worked for Local Government.

[alavahalf]

A local council pension would be offered anyone who has worked for a town or parish council.

[Hopkirk]

I have my doubts that it is 100% tax free lump sum. I don't think retired civil servants are treated differently by the tax man.

[237SJ]

^ I was thinking the same. I`ve never heard of a pension that you can take 100% tax free.

[Hopkirk]

My question to the pension providers would be whether I could transfer the £20,000 other pension into his main pension.

[bobbinwales]

Agree that there not going to be totaly tax free. Yes he could take them as lump sum but 75% would be taxible

[bobbinwales]

Am confused as you say it's all totally tax free but later say obviously only 25% would be tax free and he'll pay tax on the test of the lump sum

[bobbinwales]

Just take the max possible tax free lump sum usually 25% but maybe more if your really right about this strange local goverment one. Then take the rest as income. If the income makes him below the personal tax allowance then take more income and less lump sum.
Try pension wise first. The pots seem probly to small to me to make paying for advice worth while.
Do you know the size of the local goverment pot??

[Peter Pedant]

er blimey
a bit of thrashing around here by the er pension experts

the qustion is - 2 pensions, can you take 25% tax free in both or is there a cap?

https://www.thisismoney.co.uk/money/pensions/article-5170985/Can-25-one-pension-leave-later.html

looks as tho you can

ring up the pension scheme that DOES answer and say that it is the second pension, does it affect the 25% rule....

[bobbinwales]

No pp we weren't thrashing around. Looks to me like you've missunderstood. The OP said 'hes entitled to take the whole lot tax free' ( tho maybe referring just to the local Goverment scheme). That's a key point we' re queerying

[bobbinwales]

We all knew he can get 25% of each pot tax free so we weren't thrashing around

[davebro]

How could anyone "forget" about a £20,000 pension pot - beggars belief!

[bobbinwales]

Easily done davebro if you worked somewhere with a company pension for a few years maybe when you were aged around 20 forty odd years ago

[davebro]

I didn't forget about mine from the 60s - got £65 as a lump sum!