Is this a stupid idea?!!!

I have got a financial advisor coming next week to help me out, thanks everyone for your advice.

You have to be really canny and seek financial advice.
I remember now, what I did. I was quite unwell and couldn't cope with it at the time. It was an additional pot I contributed to, because I knew my teacher's pension wouldn't be great and I too was a waspie.
On the advice of the financial adviser I took 25% and the rest was reinvested. I have made a fair bit of it back.

I would think it better to draw on OH pension first as his pot is bigger.
Does he have any occupational pensions? If OH has serious health issues and not able to work again then he may be able to claim the pension early through disability ... even from deferred pensions.
Whatever, get advice before you do anything. You should be entitled to a free consultion with the pensions advisory service.
But hopefully he makes a good recovery and you enjoy many years together.

Seize the day!! You have one life; you are getting older. My OH worked till 60, then got Parkinsons and got steadily iller - bang goes retirement fun - you do not know what is round the corner.

Smileless2012

of the OP takes 25% of the total of her pension pot which equates to £8K then there is no tax to pay on the £8k.

Interesting. My pension provider didn’t allow me to take out the 25% tax free sum all at once. Just as well really. As a WASPI with only a small private pension as income for 6 years, I took out just enough of the taxable amount each year to keep under my tax allowance and so got the whole pot tax free.

Check the taxation situation. If you take more than the approved 25%, you can end up with the HMRC getting more of your pension than you do.

If your DH had bypass surgery he could end up outliving you.

I understand your thoughts, and yes, it is a good idea to do the nice stuff because none of us know what is around the corner. Why not just take the 25% tax free? £8k is certainly sufficient for a good cruise for the two of you, this will leave the balance to hopefully accrue growth which you may well be glad of when you retire. We have a couple of very small pensions which give enough to pay for a nice break every year, not life changing amounts, but certainly life enhancing! Good wishes for your husband's recovery, and do take care of yourself as well.

You only get one bite of the cherry so to speak Kittylester so as far as I know you can take 25% in one go tax free.

The are at least two different ways of doing it:
1. Take the whole 25% tax free amount in one go. Doing this would limit to annual amount you could pay into any future pensions. The remaining 75% would be taxed as income, whether you took it at the same time or took it out in bits and bobs over the years. One danger of taking all 100% of the pension at once is you could get pushed into the higher tax band depending on how much other income you have in that tax year.
2. Instead of taking the 25% tax free lump sum, you take smaller lump sums. So for each smaller lump sum 25% is tax free and 75% as taxable income, and that could be done for any number of years.

I have just taken 25% of a pension pot no tax liability.

I agree with smileless.

Am I correct in thinking that you can take 25% in each financial year?

Perhaps £1000 is a slight underestimate for an annuity on £32,000,, but if it was index linked to inflation and able to be passed onto your husband if you died first, then it wouldn’t be much more than £1000. Of course left invested for ten more years, who knows, it could double in value.

I suppose when you do eventually start taking it, whether now or later, it will be some form of drawdown, as £32,000 would probably only buy an annuity of around £1,000 a year, depending on whether or not it was index linked.

We retired as early as possible - did the sums and agreed to live on beans if necessary but got on with our plans to travel. I have never regretted it. We are both now much less mobile and happy to stay at home most of the time but we have very happy memories and no unticked destinations. Also it is surprising how far the money goes when you do not have to factor in the expenses of working.

of the OP takes 25% of the total of her pension pot which equates to £8K then there is no tax to pay on the £8k.

GrannyGravy13

I would take the 25% tax free, and leave the remainder for my retirement.

It’s not as simple as that, GG13. If the OP takes 25% of the pot now, ie £8k, only £2k of that would be tax free and tax would be payable on the other £6k.

Taking 25% out of a very small pot would significantly diminish your retirement income.

After the 2008 financial crash my investments in 2009 were worth half of what they had been in 2007, but by 2015 they were worth double what they had been in 2007.

I would take the 25% tax free, and leave the remainder for my retirement.

Scentia

I am at an age (55) where I can draw down my private pension if I want. It is only worth 32k at the moment but I know if I leave it in there it will be a lot lower than that due to the global financial situation.
I am considering drawing it all out, not just the tax free 25% (which was my first idea) my DH has a much better pension and I feel that we can do some great things with this 32k (less tax) whilst we are fit and well. DH had a heart attack 10 weeks ago and I seem to have a very different outlook since then. Just don’t know if it is a totally silly idea. WWYD???

Your pension fund doesn't stay static. The money is being managed and invested. If you leave it it will grow. I have a fund that in 2020 grew by 20%, despite Covid. Now, of course, we're about to go into a major recession with high inflation so there's no saying what the situation will be in a few years. But I just wanted you to know that in the 12 years you (technically) have left to work, it could increase considerably.

Given your husband's circumstances I can totally understand your desire to celebrate life while you can, but like another poster I suggest that you don't take what might be seen as a major life decision while you're still in shock at his brush with mortality. Sit down with your husband and take a firm look at your finances, calculate your state and private pensions and see where you stand. I hope a long cruise still looks like a good idea once you've worked out the sums.

Have to say I think you would be nuts! You have no idea what’s around the corner, while heart attacks are serious they don’t need you to throw all plans in the air. I had a heart attack twenty years ago. Then I got an amazing job that I really loved.
Serious illness concentrates the mind, try going part time, don’t take your pension out. If there is a recession as many think there might be you will be very relieved to have a full pension in the pot.

Rather than take the whole 25% tax free lump sum in one go you can now take out a number of smaller lump sums. If you do it that way for each small lump sum 25% will be tax free and 75% will be taxed as earnings.

as a lump sum

The first time you access funds from a private pension is the only time you get 25% tax free. If you just take 25%, the remainder will be subject to tax whether you take it as a lump or in smaller amounts.

If it were me, I'd take the 25% tax free for now Scentia.

I don’t want to sound morbid, but if your husband were to die what would your income be? Do his pensions include a widow’s benefit and if so how much? It will be many years before you get the state pension so you really need to think this through. I realise that your pension pot is very small but it could easily increase substantially over the years.