LOG
Very well known Exeweb poster
There’s always a “but” or a “possibly” - it’s arse covering as I don’t know what type of pensions you have, your circumstances, your health, your expectations and so on.
In general terms, and whilst I don’t want to get drawn into a conversation about spunking anything in Bangkok, the answer is yes, you can have your dirty weekend away by doing this and without directly affecting your proper pension (see below). Based on current roolz you could take your money out as a one-off lump sum, 25% of it tax-free and the other 75% potentially taxed depending on what other taxable income you have – although this particular pension pot is small it could, when added to other taxable income, push you up into the next tax bracket, for example.
However, one implication of doing this, which is known as taking an uncrystalised funds pension lump sum (catchy, eh?), that may affect your proper pension is that you will trigger the money purchase annual allowance which will mean that if you are paying into a pension either now or in the future the total annual contributions allowed (without incurring a tax charge) will be limited. From April, this limit is £4,000 p.a.
There are lots of other considerations as to whether it's the right thing to do but that's the simplest factual summary I can manage. It might not, therefore, be appropriate to you and your circumstances. Chuck Brinty a few hundred quid though and he'll do a full fact find for you (Brinty - 25% payaway for the referral please).
Who said pensions were boring?
This post should not be construed as financial advice, is based on the understanding of current legislation blah, blah, blah.
