Should I take my pension early?

T

Tintagel

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Should a person aged in their late 50's now retired in a deferred defined benefits pension take their pension now or wait until age 65? A lot of senior people have resigned from the same company and may well be drawing down their own pensions early. There is also the fact that a lot of staff will reach age 65 at about the same time?
 
Is there a mathematical formula or website that can calculate the amount of pension a person would receive if taking it early?
 
They may not be permitted to take benefits early - from my experience the majority of DB schemes are refusing consent to early retirements due to the current situation. Firstly contact the administrator/ HR to see is it possible and if so how much would the reduction be - it could be quite penal.
 
Also, consider the possible income tax scenarios, taking pension earlier versus later.
 
The lump sum element of your pension will be tax-free and the balance will be assessable for Income Tax, along with whatever other income you have.
 
"The lump sum element of your pension will be tax-free and the balance will be assessable for Income Tax, along with whatever other income you have."

Under Current Leglisation ;)
 
LDFerguson said:
The lump sum element of your pension will be tax-free and the balance will be assessable for Income Tax, along with whatever other income you have.
Click to expand...

Just to clarify. The balance i.e. the monthly pension income will be taxable? If you don't have any other income and are outside the tax bracket then do you still have to pay tax on the pension income?
 
Pension income is assessable for Income Tax but if you're below the exemption threshold and your pension income doesn't push you over the threshold, pension income will be tax-free.

As monagt so rightly points out above - "under current legislation".
 
LDFerguson said:
Pension income is assessable for Income Tax but if you're below the exemption threshold and your pension income doesn't push you over the threshold, pension income will be tax-free.

As monagt so rightly points out above - "under current legislation".
Click to expand...

In relation to a relative who has been abroad for some years and now comig home and eligable for a small pension and no other direct income...
If the above applies, and you have been out of the tax loop for a number of years, do you still have to get and submit a tax free cert etc, or does it apply automatically and no tax deducted?
 
You have to get a tax credits certificate from Revenue. Otherwise, emergency tax will be applied.
 
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