Best income return for 5 years with tax free cash

eaglealfa

I'm just about to take out a SIPP and use it for income drawdown in 5 years time when I'm 65, in the meantime I want to use 25k of tax free cash to provide an income of £500pm, I'm also a non tax payer, seems like I have two options, one is to put into best savings accounts probably no more than two years at a time or a low risk equity based fund. Suggestions please.

kidmugsy

"I want to use 25k of tax free cash to provide an income of £500pm": not available from any sensible investment or savings. £500pm = £6k pa = return of 24% per annum. Not poss.

Annisele

When you say you want to use £25k to produce an income of £500pm, do you mean that you want to preserve the capital? Or are you going to be spending the £25k?

Any particular reason you don't want to buy an annuity now?

Loughton_Monkey

Getting an income of £6,000 a year from a £25,000 investment - tax free or not - when the Base Rate is 0.5% and FTSE100 is slightly down year to date, makes the word 'ambitious' look like an understatement.

dunstonh

Also crystallising the pension now to take the 25% TFC only with no income only to put it in a savings account is just daft. You reducing the death benefits on the pension and reducing the amount of TFC you can draw in 5 years time when you want to start the pension on drawdown.