63 year old wants to cash pension fund

B

Buddha

Registered User
Messages
33
A friend of mine has a small fund (< E10,000.) in the construction workers pension scheme.

He wants to cash it rather than purchase an annuity which would be pretty small.

Can anyone advise is this possible and what the tax implications are?

He is nearly 64.

Thanks.
 
CWPS scheme has a Normal Retirement Age of 65, it would be highly unlikely that they would let him retire early. As the pension fund is small he will be able to take the benefits as a "Trivial Pension" which means that he will be able to take part of it as a tax free lump sum with the remainder as taxable cash. The level of tax that he will pay will depend on his tax credits, tax bands, other income etc. so would not be able to answer that part of your question.
 
3/80 of his highest years salary/income over the last 5 years prior to ending his employment
 
Early retirement is permitted from age 60 under the rules of the Construction Workers Pension Scheme. The maximum tax free cash that can be taken under the rules of the scheme is 25% of the fund value. The revenue limits of 3/80ths quoted above only apply to additional voluntary contributions. The balance of the fund can be taken as a once off taxable sum which will be taxed as earned income.
 
You must log in or register to reply here.
Back
Top