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I am paying maintenance through the CSA for my child and am happy with this. I have just reached 55 and might want to take some or all of my pension pot from my personal pension. Can anybody tell me how this will affect my maintenance payments?
So for example I get the first 25% of my pension lump sum tax free and pay tax on the remainder. Does the CSA see the whole of the lump, or the taxable part of the lump sum as income or is it seen as savings or what? What effect does it have on my CSA payments.
Any ideas?
I would get professional financial advice on this, and also speak to pensionwise (which is free) - I am pretty sure that the HMRC treat the lump sum as income, and as such, I would say (but could be wrong) that the CSA will ten include this lump sum in their calculations. If you are taking some of the pension, you may be able to take the tax free lump sum only (if your company doesn't allow this, then you can transfer the pension to a company that does allow it).
Thanks for your reply. I did speak to pensionwise already and they did not know the answer. They suggested, however that the lump sum might be treated as savings but could not enlighten me as to what that would mean with regards to the CSA. Stuck now for where I would go for further advice.
If it's treated as savings, then the CSA allowed up to £65,000 of assets (not including the house), and over that then you were assumed to be receiving 8% interest as an income. I'm not sure on the CMS rules, but I'm guessing they'd be similar. It might be worth contact the CSA and asking them, and ask them to quote any specific rules so you can double check.
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