Pension recycling

If you’re planning to take your tax-free lump sum and pay into the same pension pot or another one, you need to be aware of ‘pension recycling’ laws.

It could be pension recycling if you intend to use the tax-free lump sum to pay into a pension to get tax relief.

If HM Revenue and Customs decide you have broken pension recycling laws, you may have to pay tax on the whole of the original tax-free lump sum – even if you only recycle some of the money.

Get financial advice if you want to reinvest your tax-free money into a pension.