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Did anyone panic and take out 25% tax free from their pension ?
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Andrew1952
Posted: 18 November 2024 19:05:04(UTC)
#1

Joined: 06/07/2019(UTC)
Posts: 538
As per subject.

Did anyone take out their 25% tax-free lump sum prior to the budget
and now regrets it ?

Andrew
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Nigel G
Posted: 19 November 2024 08:53:01(UTC)
#2

Joined: 03/07/2014(UTC)
Posts: 442
Apparently not!

I moved a small amount (~6%) into drawdown and took the tax-free element, although I had already intended to do this. The impending budget may have focussed my attention, but it didn't make me change my plans.
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Robert D
Posted: 19 November 2024 09:08:06(UTC)
#3

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Posts: 1,479

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Making big irreversible decisions based on rumour and speculation never made any sense to me. As they say, "if in doubt, do nowt".
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2 users thanked Robert D for this post.
J Thomas on 07/12/2024(UTC), Thrugelmir on 17/12/2024(UTC)
Evies Dad
Posted: 19 November 2024 10:25:38(UTC)
#4

Joined: 26/11/2019(UTC)
Posts: 123
I have a friend who is an IFA who told me a couple of his clients with large DC pensions had insisted on taking the tax free cash but were considering putting it back under the 30day rule.
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Brockend
Posted: 19 November 2024 10:50:19(UTC)
#5

Joined: 18/02/2016(UTC)
Posts: 319
This article touches on cooling off periods, maybe helpful if you've changed your mind?


https://citywire.com/new...e-cash-fallout/a2454031

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Nigel G
Posted: 03 December 2024 19:52:47(UTC)
#6

Joined: 03/07/2014(UTC)
Posts: 442
Hargreaves Lansdown wrote:
Previously, you were able to cancel your Drawdown Account up to 30 days after the opening date of the account. We’ve extended this on a one-off basis so that anyone who applied to open a Drawdown Account between 29 July 2024 (when the date of the Budget was confirmed) and 30 October 2024 (the date of the Budget) now has until 10 January 2025 to let us know they want to cancel their Drawdown Account.
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Tim D on 03/12/2024(UTC)
D Bergman
Posted: 03 December 2024 20:24:00(UTC)
#7

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I have not done so yet but am planning to take the 25% TFS in the next few months.
The reason for doing so soon is to gift it to my heirs as a PET, and obviously the sooner I do so, the greater the chance of my surviving 7 years.
Even if I don't survive, the gifted sum will only be subject to 40% IHT at most, rather than IHT + income tax.
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5 users thanked D Bergman for this post.
Guest on 03/12/2024(UTC), Carl blue nose on 07/12/2024(UTC), Paulafrancis on 07/12/2024(UTC), Long-term investor on 15/12/2024(UTC), dd on 03/01/2025(UTC)
John Bleke
Posted: 04 December 2024 09:25:40(UTC)
#9

Joined: 06/03/2023(UTC)
Posts: 246
Not exactly pain. I took some of my TFLS last year. I then took the remainder in Oct 24 thinking our lovely customer service rep at HBOS would reduce the limit to £100k. When she didn't I then reversed it in the cooing off period and paid the funds back to II.
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Nigel G
Posted: 04 December 2024 10:02:52(UTC)
#10

Joined: 03/07/2014(UTC)
Posts: 442
John Bleke;327683 wrote:
Not exactly pain. I took some of my TFLS last year. I then took the remainder in Oct 24 thinking our lovely customer service rep at HBOS would reduce the limit to £100k. When she didn't I then reversed it in the cooing off period and paid the funds back to II.

Don't the cancellation rights only apply to the first move into drawdown? Where there have been subsequent moves to drawdown then, I thought, cancellation rights do not apply and the transaction cannot be reversed.
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John Bleke
Posted: 04 December 2024 11:16:20(UTC)
#11

Joined: 06/03/2023(UTC)
Posts: 246
I took 100% of my TFLS last year. I then built up a further uncrystalised pot through extra contributions and recycled small amounts all very carefully done with respect to the recycling rules. So I crystalized that and took a further 25% (admittedly not a huge amount) and then cancelled it and paid it back after the budget. So yes, you can reverse any drawdown it seems.
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