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  • FIRST POST
    • Blackavar
    • By Blackavar 2nd Feb 18, 10:34 PM
    • 61Posts
    • 15Thanks
    Blackavar
    Stocks & shares ISA newbie advice please
    • #1
    • 2nd Feb 18, 10:34 PM
    Stocks & shares ISA newbie advice please 2nd Feb 18 at 10:34 PM
    Okay, at last I've realised that banks are no longer the places to make my savings grow I want to start a S&S ISA. Have spent a long time reading up on this via sites recommended by you guys and slowly getting there.
    As a toe in the water looking at either Vanguard or HSBC with ready made Fund dependent on risk level. Is my only consideration the charges applied?
    I am going to fund this from crystallizing some of my pension pot as I am keen to withdraw my max TFA as I have no income and 3 years until my state pension kicks in.
    Surely it's best to drawdown my max TFA from my pension before my state pension starts and then I will into paying tax - or am I missing something?
    Thanks for any advice on this.
Page 1
    • Blackavar
    • By Blackavar 5th Feb 18, 11:32 PM
    • 61 Posts
    • 15 Thanks
    Blackavar
    • #2
    • 5th Feb 18, 11:32 PM
    • #2
    • 5th Feb 18, 11:32 PM
    Wow thanks?
    • AnotherJoe
    • By AnotherJoe 6th Feb 18, 8:07 AM
    • 8,249 Posts
    • 8,981 Thanks
    AnotherJoe
    • #3
    • 6th Feb 18, 8:07 AM
    • #3
    • 6th Feb 18, 8:07 AM
    Your post is contradictory. You talk about not just saving cash, but Isn't your pension already invested? So it makes no sense to take money out, which will involve selling investments, and then buying investments.

    Living off the tax free lump sum is a good strategy but that doesn't mean you should immediately invest it all uf its all needed to live off, indeed over a 3 year period arguably you might not invest any of it as the possibility of a stock market correction could be very damaging.

    No idea what your second post means. Was there a previous post which was deleted ?
    • cloud_dog
    • By cloud_dog 6th Feb 18, 8:58 AM
    • 3,508 Posts
    • 2,028 Thanks
    cloud_dog
    • #4
    • 6th Feb 18, 8:58 AM
    • #4
    • 6th Feb 18, 8:58 AM
    Okay, at last I've realised that banks are no longer the places to make my savings grow I want to start a S&S ISA. Have spent a long time reading up on this via sites recommended by you guys and slowly getting there.
    As a toe in the water looking at either Vanguard or HSBC with ready made Fund dependent on risk level. Is my only consideration the charges applied?
    I am going to fund this from crystallizing some of my pension pot as I am keen to withdraw my max TFA as I have no income and 3 years until my state pension kicks in.
    Surely it's best to drawdown my max TFA from my pension before my state pension starts and then I will into paying tax - or am I missing something?
    Thanks for any advice on this.
    Originally posted by Blackavar
    Hi

    We get many such posts on these boards and as usual, no disrespect, but there is a lot of information missing. Also, as Another Joe picked up on your post is contradictory.

    Based on what you have told us, and only that, the simple answer is, no.

    The reason for this is that if you are withdrawing cash from your pension to live on then re-investing it for a short period of time is not a sensible approach, you risk losing money you have told us you require to live on until your SP kicks in.

    Obviously, at this point with the information you have provided we have no knowledge of what other savings you may have, what other pensions you may have, if you are working at present, etc, etc.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • Blackavar
    • By Blackavar 6th Feb 18, 6:20 PM
    • 61 Posts
    • 15 Thanks
    Blackavar
    • #5
    • 6th Feb 18, 6:20 PM
    • #5
    • 6th Feb 18, 6:20 PM
    Thanks for replies and agree with point made about why sell pension funds (from 300k pot) to buy more funds in an ISA. My SP kicks in in 3 years so my thought was to withdraw max tax free allowance in each year as will no doubt be paying tax afterwards. I don!!!8217;t currently need the cash as living off dwindling savings of around £150, so maybe I should invest some of this cash in S&S ISA. I guess I!!!8217;m a bit hung up on paying as little tax as possible.
    • cloud_dog
    • By cloud_dog 6th Feb 18, 6:28 PM
    • 3,508 Posts
    • 2,028 Thanks
    cloud_dog
    • #6
    • 6th Feb 18, 6:28 PM
    • #6
    • 6th Feb 18, 6:28 PM
    In which case....

    It makes sense to draw on your pension. If you have no other taxable income at the moment then I would withdraw an amount equal to at least your personal tax allowance (17/18 £11500); this way your usually taxed pension income is completely tax free (within your tax allowance). I wouldn't be using your savings to live on atm. That is my view and it may not be right for you.

    If you don't need all of the money drawn from your pension then by all means put it to work in a S&S ISA as part of your longer-term strategy. Even people approaching retirement need to maintain an investment level of some kind (based on their circumstances / attitude to risk).
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • cloud_dog
    • By cloud_dog 6th Feb 18, 6:31 PM
    • 3,508 Posts
    • 2,028 Thanks
    cloud_dog
    • #7
    • 6th Feb 18, 6:31 PM
    • #7
    • 6th Feb 18, 6:31 PM
    To get in to the finer detail you would need to disclose if you have other pensions that may become payable in the future (other than SP) and what savings / investments do you currently have.

    Additionally, have you checked you SP? Are you in line to draw the full amount possible?
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • Blackavar
    • By Blackavar 6th Feb 18, 10:12 PM
    • 61 Posts
    • 15 Thanks
    Blackavar
    • #8
    • 6th Feb 18, 10:12 PM
    • #8
    • 6th Feb 18, 10:12 PM
    Really appreciate your input - thanks very much.
    Full situation is:
    Me: Age 63, various pension pots totaling around £300K, SP of £8326 starts May 2020, no foreseeable income, Savings around £150K in best current rate bank accounts and premium bonds.

    Wife: Age 56, small work pension of £4K starts 2021, SP of £8326 starts May 2028.
    The problem I have is that my younger wife's SP doesn't start for 10 years - if not for this I wouldn't be struggling for what to do to provide us with a joint income in excess of £25K per annum.
    I have met with 3 IFA's none of which I've felt comfortable with and during my retirement have tried to educate myself using sites mentioned on here.
    My plan was/is to move my pension pots onto a managed fund platform, either aegon, where most of my pension is or maybe Vanguard Lifestyle 60. Then take the max tax free amount out until my SP starts in 2020 (I feel like I'm wishing my life away until SP starts).
    As I have a cash fund I don't see the need to take 25% now.
    My attitude to risk out of 5 is 4, hers is at best 2 so looking at a medium risk I guess when pension is moved into a fund that I can access.
    So my reason for getting my TFA out of my pension was to avoid tax later and as not really need the cash was thinking invest in S&S ISA in the hope it grows but as pointed out, why sell pension investment just to reinvest.
    Should have married an older woman Not really.
    • Thrugelmir
    • By Thrugelmir 6th Feb 18, 10:16 PM
    • 57,535 Posts
    • 50,830 Thanks
    Thrugelmir
    • #9
    • 6th Feb 18, 10:16 PM
    • #9
    • 6th Feb 18, 10:16 PM
    Your wife still has an opportunity to build further pension provision for herself.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Blackavar
    • By Blackavar 6th Feb 18, 11:26 PM
    • 61 Posts
    • 15 Thanks
    Blackavar
    Unfortunately I convinced her to retire too (as I know she wanted to) and now I have to create a strategy for both of us. I think we will be okay if I can make the right choices regarding investment and cash allocation.
    • cloud_dog
    • By cloud_dog 6th Feb 18, 11:35 PM
    • 3,508 Posts
    • 2,028 Thanks
    cloud_dog
    A couple of things....

    You can take 25% TFLS at any point. Doing this crystalises your pension pot, meaning any subsequent withdrawals would be subject to the possibility of tax.

    It sounds like you want to take an uncrystalised withdrawal. This means 25% of the withdrawal is tax free and the remaining 75% of the withdrawal is taxed.

    My only other comment would be to take out as much as you can from your pension tax free whilst you can, and then the 25% when it suits you.

    Based on the 17/18 personal allowance of £11500 tax free income you could do a uncrystalised withdrawal of £15333 and not pay any tax. It is likely to be taxed initially but you will be able to reclaim it from HMRC.

    The only caveat is that I'm unsure if the Aegon platform accommodates uncrystalised withdrawals.
    Last edited by cloud_dog; 06-02-2018 at 11:38 PM.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • cloud_dog
    • By cloud_dog 6th Feb 18, 11:41 PM
    • 3,508 Posts
    • 2,028 Thanks
    cloud_dog
    A comment on taking the 25% TFLS now is that you have longer to utilise your ISA allowance and to add these monies in to ISAs and therefore protect future income from taxation. The need to do this may not be a priority.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • Blackavar
    • By Blackavar 6th Feb 18, 11:50 PM
    • 61 Posts
    • 15 Thanks
    Blackavar
    Really appreciate your input Cloud dog. This confirms I am not going mad and my plan is about right for an investor newbie keen to learn the skills. I have a call booked with aegon tomorrow to discuss this but if not allowed I guess I will just crystallise a smaller pot?
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