Hi, I enquired about some pensions that I took out many moons ago.

All of the pensions have been frozen, except my current pension.

The first i paid into from the age of 16 in the late 70's, approx 10 years contrbutions.

The second was a brief period where i worked for a company approx 18 months, in the late 80's.

The third was for approx 15 years frozen in 2005

The fourth is to date, I am 55.

I have asked for an update on all three frozen pensions, the first to come through was the 18 month contribution pension. The value is just over 3000 pounds, quite surprised to be honest, but it was a long time ago, it is referred to as a WULS

I have several questions if I may. 1/ I presume this 3000 pounds will be subjected to a 20% tax? I am a sole trader as well as PAYE, and I fill in a tax return which reflects this. My question relates to how i go about paying the tax on this money. The letter does state that PIC will deduct income tax, at the rate " it " is required to do so. How does PIC go about calculating the rate if it is not 20%? I am just trying to work out what I will end up with, and how it may affect my other pensions. 

2/ I understand we are allowed to take tax free cash lump sums from pensions we hold once we reach the age of 55. I also understand there are numerous schemes out there which will help me invest this money.

I think I know the answer to my question but I will raise it if I may.

The WULS pension payout is so small they just wind it up and pay me off, and it is taxed accordingly prob at source. The other pensions will no doubt offer me this 25% tax free lump sum business with strings.

Should I decide to take these lump sums in one tax year, will this be considered as part of my earnings for the year, and will I get taxed (income tax) at a higher rate? Or because it is taxed at source I dont even have to declare it as income?

Would it be best to draw them a year apart including the WULS?, oe does it not really matter.

Many thanks in advance for your help.

Best regards Martin