I am a retired police officer, and receive a police pension and the state pension. I made contributions to a self-invested personal pension (Sipp) for about 10 years but recently stopped doing this because I have reached age 75.
I could take 25 per cent of my £46,000 Sipp – £11,500 – as a tax-free lump sum. But will it actually be tax-free? If taking the lump sum pushes me out of the lowest tax bracket into the next highest band, will I be liable to pay more tax? If this is the case, would it be better to take a smaller amount and remain in the lowest tax bracket? GS
