Releasing Pension Benefit While Working

Old familyReleasing Pension Benefit while working is becoming a popular option with some people attaining age 55, some choosing to work fewer hours and supplement their income from their pension. Others may want access to their pension commencement lump sum (which is currently tax free) and do not require income as they wish to remain employed full time. One thing to remember is that pension income is subject to income tax so therefore your gross pension payment will be added to your earnings and taxed appropriately. This on many occasions will place the individual into the higher rate tax bracket however with careful planning you may avoid this tax. 

In many of these instances it would be possible to release the lump sum only or release your lump sum and regulate the amount of pension income to your needs rather than drawing the full benefits if they are not required at this time. This would be termed as drawdown.

 

 

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