Pension tax rules
When you take your pension, you can usually take up to 25% as a tax-free lump sum. The lump sum allowance caps the amount of tax-free cash you can take at £268,275. Your allowance may be higher if you hold a protected allowance.
If a member is taking all their benefits as a lump sum due to serious ill-health where expectation of life is less than one year, then specific tax considerations apply.
Considering the tax implications of taking your pension benefits can be complex. If you want more information on tax, we highly recommend you speak with an independent financial adviser.
After you’ve retired, you will still have to pay income tax on any income over your personal allowance. This applies to all your pension income, including the State Pension.
There is a lump sum payable on the death of a deferred member, payable according to the Rules of the Scheme. The beneficiary or beneficiaries of this lump sum pay no tax on it.
Any pensions payable to beneficiaries on the death of a member are treated as income of that beneficiary and taxed as income.
For more general information, you can contact the Scheme Administrator, Aptia. Aptia is happy to help you better understand your pension, but please remember that the team cannot offer you financial advice.
You may also want to look at MoneyHelper for more information. This is an impartial service set up by the Government to provide free guidance on financial matters.
