Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • stephen160
    • By stephen160 5th Feb 18, 11:13 AM
    • 26Posts
    • 2Thanks
    stephen160
    Pension. Isa dilemma
    • #1
    • 5th Feb 18, 11:13 AM
    Pension. Isa dilemma 5th Feb 18 at 11:13 AM
    Pension/Isa advice. I am 56 , thinking of retiring next year. I have £500000 in stock and shares Isa and £500000 in a DC Sipp. When I retire I will have no further income.
    My question, is it worth me transferring funds from my isa to my pension whilst I can get the tax relief, or leaving the funds in my isa for greater flexibility.
    Many thanks in advance
Page 1
    • JoeCrystal
    • By JoeCrystal 5th Feb 18, 11:15 AM
    • 1,369 Posts
    • 822 Thanks
    JoeCrystal
    • #2
    • 5th Feb 18, 11:15 AM
    • #2
    • 5th Feb 18, 11:15 AM
    Pension/Isa advice. I am 56 , thinking of retiring next year. I have £500000 in stock and shares Isa and £500000 in a DC Sipp. When I retire I will have no further income.
    My question, is it worth me transferring funds from my isa to my pension whilst I can get the tax relief, or leaving the funds in my isa for greater flexibility.
    Many thanks in advance
    Originally posted by stephen160
    So you got an asset of £1 million pounds hmm? Why don't you find an IFA who will be able to advise you on the best course of actions? Well, read up on annual allowance and lifetime allowance for a starter.
    • ams25
    • By ams25 5th Feb 18, 11:35 AM
    • 135 Posts
    • 150 Thanks
    ams25
    • #3
    • 5th Feb 18, 11:35 AM
    • #3
    • 5th Feb 18, 11:35 AM
    Are you a higher rate tax payer?
    • stephen160
    • By stephen160 5th Feb 18, 11:36 AM
    • 26 Posts
    • 2 Thanks
    stephen160
    • #4
    • 5th Feb 18, 11:36 AM
    • #4
    • 5th Feb 18, 11:36 AM
    Thanks JoeCrystal , but I have never used an IFA and I am unlikely to do so.
    I am unlikely to reach the lifetime allowance, another £30000 at the most into my pension then withdraw 25%, so I will be a way off 1 million.
    I am a basic rate tax payer, I have £15000 annual allowance left this year and was wondering was it worth me selling some isa funds to put into my pension
    Last edited by stephen160; 05-02-2018 at 11:39 AM.
    • AnotherJoe
    • By AnotherJoe 5th Feb 18, 11:38 AM
    • 8,238 Posts
    • 8,965 Thanks
    AnotherJoe
    • #5
    • 5th Feb 18, 11:38 AM
    • #5
    • 5th Feb 18, 11:38 AM
    Are you a high rate taxpayer?
    If so definitely max out your pension this year and backdate if possible to the max. 40% relief on way in, most probably none to pay on way out since you wont be paying tax until you get SP.

    If not, its still worth it. Say you put £32k in (assuming you earn £40k) which gets bumped up to £40k (minus whatever you've already put in).

    Over the next 10 years, not earning anything, you can draw that down from the SIPP without paying tax, so you've gained 20% without any inflexibility. Draw down from shares to supplement.
    • ams25
    • By ams25 5th Feb 18, 11:52 AM
    • 135 Posts
    • 150 Thanks
    ams25
    • #6
    • 5th Feb 18, 11:52 AM
    • #6
    • 5th Feb 18, 11:52 AM
    I would put in the 15k. 20% tax relief and 25% tax free back.

    If you drawdown c.3% from your sipp after the tfls and use the tfls to build isa funds back up you can draw around 30k pa tax free across both (or more). Without nat insurance, income tax and pension contributions you will probably find your net income is the same or better than your employment earnings (at least under current rules)!!
    • JoeCrystal
    • By JoeCrystal 5th Feb 18, 12:44 PM
    • 1,369 Posts
    • 822 Thanks
    JoeCrystal
    • #7
    • 5th Feb 18, 12:44 PM
    • #7
    • 5th Feb 18, 12:44 PM
    Thanks JoeCrystal , but I have never used an IFA and I am unlikely to do so.
    Originally posted by stephen160
    So how come you were able to transfer your DB pension from British Steel to Fidelity then? You can check with the IFA who did the transfer for you?
    Last edited by JoeCrystal; 05-02-2018 at 12:47 PM.
    • enthusiasticsaver
    • By enthusiasticsaver 5th Feb 18, 12:48 PM
    • 5,704 Posts
    • 11,277 Thanks
    enthusiasticsaver
    • #8
    • 5th Feb 18, 12:48 PM
    • #8
    • 5th Feb 18, 12:48 PM
    I would maximise your pension. You are still some way off the LTA. I assume you will be crystallising the pension and taking the 25% TFLS to live off initially?
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • stephen160
    • By stephen160 5th Feb 18, 2:29 PM
    • 26 Posts
    • 2 Thanks
    stephen160
    • #9
    • 5th Feb 18, 2:29 PM
    • #9
    • 5th Feb 18, 2:29 PM
    So how come you were able to transfer your DB pension from British Steel to Fidelity then? You can check with the IFA who did the transfer for you?
    Originally posted by JoeCrystal

    Yes I did use an IFA to do the transfer, but that was his only involvement, and i only used an IFa because it is the law of the land.

    Why check with the IFA , some excellent advice here.
    Last edited by stephen160; 05-02-2018 at 2:59 PM.
    • atush
    • By atush 5th Feb 18, 2:45 PM
    • 16,542 Posts
    • 10,279 Thanks
    atush
    I would whack in as much into the pension as allowed. Once you take your 25% TFLS you can start putting it back into the S&S isa
    • JoeCrystal
    • By JoeCrystal 5th Feb 18, 4:22 PM
    • 1,369 Posts
    • 822 Thanks
    JoeCrystal
    Yes I did use an IFA to do the transfer, but that was his only involvement, and i only used an IFa because it is the law of the land.

    Why check with the IFA , some excellent advice here.
    Originally posted by stephen160
    That is a relief then that you did used an IFA for the transfer then. I was just worried for a moment that it was a scam or something else since you was saying that you never used an IFA. That's all. Considering you have a half of a million in S&S ISA, you are doing well anyway.
    Last edited by JoeCrystal; 05-02-2018 at 4:25 PM.
    • kidmugsy
    • By kidmugsy 5th Feb 18, 4:55 PM
    • 10,192 Posts
    • 6,914 Thanks
    kidmugsy
    or leaving the funds in my isa for greater flexibility.
    Originally posted by stephen160
    Once you're past 55 ISAs don't have a lot more flexibility, do they? Unless you were to want to lay your hands on such a large sum that taking it from a pension would make you a higher rate taxpayer? In terms of investments you can hold I expect that SIPPs are more flexible than ISAs. They can also let you claim back withholding tax on dividends from some jurisdictions e.g. the US.

    If the 25% TFLS survives, and if basic rate tax remains at 20%, and if you remain a basic rate taxpayer, then a pound put into (say) a SIPP is worth 6.25% more than a pound put into an ISA.
    Free the dunston one next time too.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

5,290Posts Today

6,972Users online

Martin's Twitter