Pension Drawdown Question

[sretiolc]

I have a small pension which will only return £25 per month. The cash in value is £8500.
The company told me that I would get 25% tax free - the rest would be taxed at emergency tax rate but I could claim that back from HMRC.
I do not work - I am retired early with a superannuation pension.
Does anyone know what rate emergency tax is and how much of it I could claim back (and when could I claim it back ?)
Thankyou

[ubasses]

Emergency tax code usually means that all your income is taxed at 20% as if you do not have an annual tax allowance. As your Company pension will have your allowance assigned to it, this will result in the whole £8500 being taxed. Just give the tax office a ring as soon as it happens and they will send out a return for you to complete and resolve the issue.

[Peter Pedant]

well at least they were forthright

well we are four days away from the end of the tax year 2014-5 and the tax return for that year is due ... Jan 30 2016 ( yes I have the years right ) and with computer tax returns, the rebate is in a few days from that

and if you get the pension in May say then the date for the return and the claim for th e rebate is Jan 30 2017

BUT - people will tell you IF you can submit your tax form early and get an early rebate ( I think not as you would be gettng a rebate on a year that you would still be paying tax for and I dont think taxmen are that generous )

and what about the exciting news that tax forms are going ?
No sign of that yet

emergency rate is 40% flat - and I am not sure if they dont have a tax free band. ....I think not - I think they just subtract 40 %

And finally what do you get back - depends on what you are paying at present without prying. The last time I advised a pensioner it was unlikely that he was paying the last part of his income at 40% said: well yes I do actually ... in which case you cant claim any back

IF you pay tax at 25% then it ( amont repayable from the tax man ) would be 15% of the sum they had taxed

I think.... I didnt do this full time before I retired, I did something else.

I have a small pension pot and have decided to wait
on the grounds that the "rules before" are unlikely to give a better deal than "rules after" so the best thing is to wait and see.

[Peter Pedant]

Oh well there you are
a shorter and better answer

I should have had a cup of coffee instead ( and waited... my own advice in fact )

[ubasses]

I have had a scout around and found following article. Use link and scroll down to State of Emergency Heading. Think it will help explain it. if the taxable amount of your money £6375 keeps you within the 20% tax band that is what you will pay. Also looks like you can get form to complete which means you won't have to wait until the end of the tax year to reclaim.
http://www.thisismoney.co.uk/money/pensions/article-2966766/Savers-using-pension-freedom-warned-pay-emergency-tax.html

[Hypognosis]

Based on the cash-in value and assuming it starts paying out at 65, they either hope you dont live beyond 93y4m (other actuaries may beg to differ) or their cash-in value is on the stingey side (big commission deduction, is par for the course).

The new pension cash-in regulations leave me wondering who the winners really are. If the pension companies get charged business fees of a few quid *per transaction* then they will want to be ridding themselves of all these tiny monthly payments which even the recipients are bugged by.