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    • Cardinal-Red
    • By Cardinal-Red 18th Mar 17, 1:00 PM
    • 584Posts
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    Cardinal-Red
    Lifetime Allowance Planning - Does anybody do it and how?
    • #1
    • 18th Mar 17, 1:00 PM
    Lifetime Allowance Planning - Does anybody do it and how? 18th Mar 17 at 1:00 PM
    Hi I am looking for some comments on planning around the lifetime allowance rules maximising tax efficiency in my retirement savings.

    My scenario is as follows:

    - 38 now, my plan is to retire at 65 at the latest, preferably earlier
    - My current pension provision is made up as follows:
    1. Defined benefit pension from HMRC worth in today's money around £3,200 per year (after lump sum)
    2. A SIPP containing my own extra payments and transferred in DC pensions from 2 former employers, current value around £112,000 it is invested mainly in trackers currently 74:26 Equity:Bonds planning to rebalance that to 65:35 this year
    3. Current employer DC scheme paying in total £25,000 per year in contributions

    Now my future projections on this combination are based on a 3% increase in contributions per year, and growth of 5% per year on average. The final pot (even before valuing the DB scheme) comes in at over £1m on this basis.

    My wife all things being well will retire with 40 years of Teacher Pension as well.

    My plan is to take as much lump sum as possible, then enter drawdown and hopefully live off income generated from the fund, with little to no actual withdrawal of the pot.

    So now I am looking at 2017/18 and wondering whether I should change my approach a little, stop contributing to the SIPP myself, and instead use a combination of LISA and S&S instead.

    There is no point in curtailing my employer scheme as the contribution ratio is very generous.

    For completeness sake, I am Higher Rate tax payer and my wife is just about standard rate.

    I guess my first question is do people plan around lifetime allowances at all, and if so when and how? Is it now, or is it when the LTA is being approached?

    I know that pension age is some way away and rules change etc but my feeling is pension pots are not safe any more under either colour of chancellor!
    The above facts belong to everybody; the opinions belong to me; the distinction is yours to draw...
Page 1
    • bigadaj
    • By bigadaj 18th Mar 17, 5:31 PM
    • 9,362 Posts
    • 5,983 Thanks
    bigadaj
    • #2
    • 18th Mar 17, 5:31 PM
    • #2
    • 18th Mar 17, 5:31 PM
    My approach would be to continue with the pension saving so long as I can get 40% tax relief, this is an element that is continually talked about as being removed. Are all of your contributions getting 40% tax relief.

    One option if the lifetime allowance doesn't get raised is to vary your assets in terms of allocation across wrappers. So you could switch to lower growth assets within your pension if you head rapidly towards the allowance and increase risk on is a and unwrapped investments.
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