Don’t risk a double tax hit on your pension

If you’re thinking of cashing in any of your pension pot, it really does pay to get advice. Latest data from the Financial Conduct Authority (FCA)¹ shows that the number of pension pots accessed for the first time in 2020/21 totalled 596,080 of which 341,404 plans were fully withdrawn. Worryingly, only 33% of consumers taking money from their pension for the first time took regulated advice.

Those cashing in pension pots without taking advice could risk paying more tax, and those cashing in their pensions in one go could pay up to 45% Income Tax on part of their withdrawal, while also losing Inheritance Tax protection. Don’t run the risk of suffering a double hit on your pension.

¹FCA, Dec 2021

It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.