Sipp and drawdown

EdGasket

I thought one had to have a large pension pot (around £200K) for drawdown? Are you saying you can have a drawdown on a 9K pension?? Would that not be uneconomic? If you have less than £16K across all personal pensions, I thought you can just take out the whole lot as untaxed cash anyway?

jamesd

jayship, I think still no tax charge for a spouse over 75. Just for others.

EdGasket, Yes, you can have drawdown on £1,000 even. It depends on how expensive the provider is. £75 once every three years for a GAD calculation makes many things economic that wouldn't be so with a higher charge, though that's still too expensive for £1,000 and triviality would be better if possible. Then there are the usual concerns like other income, risk to income above minimal needs, investment risk tolerance and inheritance or spousal benefit objectives.

The triviality rules are now these from April 2012:

1. Up to 2k each from workplace defined benefit pension schemes, regardless of how much all you pensions added together are worth.

2. Up to 2k each from up to two personal or work defined contribution pension schemes, regardless of how much all you pensions added together are worth.

3. Then triviality only if the total value of all of your pensions is up to £18,000. You can use trading costs to get below that if it makes sense.