Post by befuddled on Dec 14, 2018 11:15:44 GMT
assume that one is:
aged 56
currently working and a 25% tax payer
hasn't maxed out pension contributions
and he makes a deposit of £10000 into a pension
standard pension tax relief leaves £12500 in pension pot
The next month the individual takes his pension as
25% tax free lump sum = £3125.00
then takes out rest of pension (£9375), which takes a 25% income tax hit, leaving him £7031
So he walks away with £3125 + £7031 = £10156, ie he gamed £156
Of course I know free money doesn't exist, and the gain is only 1.5% but still it seems unlikely to be possible !
What have I missed..?
aged 56
currently working and a 25% tax payer
hasn't maxed out pension contributions
and he makes a deposit of £10000 into a pension
standard pension tax relief leaves £12500 in pension pot
The next month the individual takes his pension as
25% tax free lump sum = £3125.00
then takes out rest of pension (£9375), which takes a 25% income tax hit, leaving him £7031
So he walks away with £3125 + £7031 = £10156, ie he gamed £156
Of course I know free money doesn't exist, and the gain is only 1.5% but still it seems unlikely to be possible !
What have I missed..?
