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    Take care when accessing your pensions 25% tax free cash

    02 March 2020

    Tim Cooke

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    2 minute read

    Pies and pensions...

    When the topic of ‘British Pie Week’ was mentioned in a recent internal communications meeting, it was suggested that our resident food lover (me, who wasn’t in the meeting) might like to write something about it.

    After my blog about burgers, I think I’ve got something of a reputation… #pigeonholed.

    Well, I thought, to live up to this reputation maybe I should set myself the challenge of eating a pie a day for the week of 2 to 8 March?

    Variety is the s-pie-ce of life

    If I were to do this I realised I would need to find enough variety of pie to keep it interesting, so I visited this site and a top 10 was suggested:

    1: Cottage Pie

    2: Fish Pie

    3: Shepherd’s Pie

    4: Chicken and Leek Pie

    5: Chicken and Mushroom Pie

    6: Steak and Ale Pie

    7: Meat and Potato Pie

    8: Pork Pie

    9: Steak and Kidney Pie

    10: Corned Beef Pie


    This is obviously nonsense, so I need to clarify one simple but important rule: a pie is not a pie without pastry sides and base. Without pastry sides and base it's just a “casserole with a lid”. Ask Mary Berry. This removes the top three for a start, and conveniently leaves 7 for a week-long challenge.

    Getting my teeth into the challenge

    Would any of you be up for trying this? Good luck finding a corned beef pie though!

    Unfortunately, I am trying to eat less meat these days, and red meat in particular. This dietary change will come as a shock to many that know me, and makes a bit of a mockery of my recent burger post. I’m not getting any younger and keeping the weight off isn’t as easy as it used to be, so I need to watch what I’m eating.

    Anyway, back to my pie-a-day-for-seven-days challenge... 

    Reducing red meat, and sticking to my simple rule, I will embark on the following:

    Monday

    Tuesday

    Wednesday

    Thursday

    Friday

    Saturday

    Sunday

    Mushroom and asparagus pie

    Meat and potato pie

    Pork pie (cheese and pickle version)

    Chicken and mushroom pie

    Vegetable pie

    Chicken and leek pie

    Apple pie

    (yes, that counts. It’s pudding for the week!)


    Now having planned this out I’m not sure it’s even a challenge. I consider myself an old hand when eating beige food, commonly wrapped in pastry.

    As any pie aficionado knows, there are methods to getting the most out of your pie, like rationing innards with outer shell to not have too dry a bite. You can also introduce portion control to avoid post-meal sluggishness and the common “mouth being bigger than your belly” cliché from fellow diners (this is where the smaller ‘single-serve’ pie can come in handy too).

    What does any of this have to do with pensions?

    Well, imagine your retirement savings as a pie. How you consume it can make all the difference to what you can get out of it (a tenuous link, but a link nonetheless).

    People lucky enough to have a large pie*, could normally have up to 25% of it without issue.

    However, taking more than 25% could lead to them paying a hefty penalty and losing some of their pie to the bin**. However, being able to have that 25% is very important and is rightly communicated as a significant benefit, loved by many.

    What is not publicised as often is the ability for those people with a smaller pie to have all their pie without giving any to the bin (as long as it doesn’t overload their smaller plate***). They can even have two more pies and the bin still wouldn’t get any, if they also fit on the plate!

    (It is important to note that pensions are not pies. Pensions are accessible from age 55 and normally only 25% of your pot can be taken tax free, unless your total income is below the level of your income tax personal allowance. Any funds taken above this may trigger tax as earned income. In comparison, pies are pastry-clad items of wonder.)

    Get in touch if you want to know more about having all your pie, or if you want to know how sick I am of pie come 9 March.


    *pension
    **taxman
    ***Pots up to £10k or less, and not taking them above their personal allowance

    Related Resource

    Our guide to pension planning
    Read the guide

    Imagine your retirement savings as a pie. How you consume it can make all the difference to what you can get out of it.

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