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  • FIRST POST
    • Alan5
    • By Alan5 12th Jan 18, 7:55 AM
    • 15Posts
    • 2Thanks
    Alan5
    Pension/ISA balance
    • #1
    • 12th Jan 18, 7:55 AM
    Pension/ISA balance 12th Jan 18 at 7:55 AM
    Hi All,
    I am retired, funding my time (six years) until SP using lump sums from defined benefit pensions. I'm sorted! My Wife(similar age) has a pension of predicted value around £110000. We have savings in S&S ISA of around £100,000 and this will be her only income for six years until SP. My dilemma, should we take her lump sum and as much pension as we can within tax free allowance before SP or leave her pension and using savings to fund her time to SP? When we reach SP age we are not totally reliant on her pension, so expect it to become exhausted relatively early.
    Any thoughts?
    Alan
Page 1
    • greenglide
    • By greenglide 12th Jan 18, 9:58 AM
    • 2,972 Posts
    • 1,922 Thanks
    greenglide
    • #2
    • 12th Jan 18, 9:58 AM
    • #2
    • 12th Jan 18, 9:58 AM
    using lump sums from defined benefit pensions.
    How do you get lump sums from defined benefit pensions?

    Do you really mean defined contribution pensions?
    • Alan5
    • By Alan5 12th Jan 18, 10:41 AM
    • 15 Posts
    • 2 Thanks
    Alan5
    • #3
    • 12th Jan 18, 10:41 AM
    • #3
    • 12th Jan 18, 10:41 AM
    Hi Greenglide, I think I mean defined benefit(?) Small a Teachers Pension and another small one from a large company I once worked for. TP is three times pension. Is that classed as 'defined benefit' ? I'm probably just showing my ignorance!
    • IanSt
    • By IanSt 12th Jan 18, 11:21 AM
    • 209 Posts
    • 160 Thanks
    IanSt
    • #4
    • 12th Jan 18, 11:21 AM
    • #4
    • 12th Jan 18, 11:21 AM
    My dilemma, should we take her lump sum and as much pension as we can within tax free allowance before SP or leave her pension and using savings to fund her time to SP?
    Originally posted by Alan5
    There's a whole multitude of possible answers so I'd advise you to get a spreadsheet together for the coming years with details of your combined expected expenditure and then using your defined income and the various permutations of possible income find the best route for your specific finances and risk profile.

    I personally would probably be looking to get as much money from the DC pension into a S&S ISA as soon as possible whilst paying the least amount of tax (i.e. keeping drawdowns to a value so it doesn't go beyond basic rate tax and preferably so that no tax is actually payable) - then use the tax free yield from the S&S ISA alongside your savings to get to SP. But that might not meet your particular needs.
    • Alan5
    • By Alan5 12th Jan 18, 11:55 AM
    • 15 Posts
    • 2 Thanks
    Alan5
    • #5
    • 12th Jan 18, 11:55 AM
    • #5
    • 12th Jan 18, 11:55 AM
    Thank you, IanSt.
    We have done Spreadsheets and your thoughts are pretty much what we concluded. Generally thinking 'Bird in the hand worth two in the bush'. Thank you!
    • swindiff
    • By swindiff 12th Jan 18, 11:59 AM
    • 274 Posts
    • 112 Thanks
    swindiff
    • #6
    • 12th Jan 18, 11:59 AM
    • #6
    • 12th Jan 18, 11:59 AM
    How do you get lump sums from defined benefit pensions?

    Do you really mean defined contribution pensions?
    Originally posted by greenglide
    My DB pension (USS) has a lump sum which is 3 times the annual pension.
    • greenglide
    • By greenglide 12th Jan 18, 12:04 PM
    • 2,972 Posts
    • 1,922 Thanks
    greenglide
    • #7
    • 12th Jan 18, 12:04 PM
    • #7
    • 12th Jan 18, 12:04 PM
    To me "lump sums" implies more than one.

    Taking a PCLS from a DB pension starts the pension payments so the OP is also in receipt of these two pensions.
    • maximumgardener
    • By maximumgardener 12th Jan 18, 8:30 PM
    • 267 Posts
    • 111 Thanks
    maximumgardener
    • #8
    • 12th Jan 18, 8:30 PM
    • #8
    • 12th Jan 18, 8:30 PM
    Hi All,
    I am retired, funding my time (six years) until SP using lump sums from defined benefit pensions. I'm sorted! My Wife(similar age) has a pension of predicted value around £110000. We have savings in S&S ISA of around £100,000 and this will be her only income for six years until SP. My dilemma, should we take her lump sum and as much pension as we can within tax free allowance before SP or leave her pension and using savings to fund her time to SP? When we reach SP age we are not totally reliant on her pension, so expect it to become exhausted relatively early.
    Any thoughts?
    Alan
    Originally posted by Alan5
    well..its good you are sorted. remember keep some emergency cash funds available.
    your wife 's income maybe be best drawn down as required from her S&S ISA's rather than raiding her pension....depends on lots of factors income you need etc etc . you could even do a bit of both!!!!!
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