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Income Draw down question
theGrinch
Posts: 3,133 Forumite
This question is for a 71-year old relative currently with a SIPP.
Regarding income draw down - can be the maximum income be taken now and then again in say April 2013 or must there be a clear 12-months between it?
Thanks for reading
Regarding income draw down - can be the maximum income be taken now and then again in say April 2013 or must there be a clear 12-months between it?
Thanks for reading
"enough is a feast"...old Buddist proverb
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Comments
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It's based on the policy years, which will normally run from the date that the first crystallisation event occurs - i.e. when benefits are first taken.
How he takes the income in each policy year is entirely up to him - therefore if, for example, the policy year runs concurrently with the tax year, he could take the max income for the year as a lump sum now, and then take the same again after 6th April, or a lump sum on 5th April and then again on 6th April, or as a combination of regular payments with the balance taken as a lump sum.I am an IFA. Any comments made on this forum are provided for information only and should not be construed as advice. Should you need advice on a specific area then please consult a local IFA.0 -
thanks for the quick reply.
so if the policy is taken into income draw down this month, the maximum income could be taken for example 20 Dec 2012 and then again on or after 20 Dec 2013?"enough is a feast"...old Buddist proverb0 -
Correct, or any other permutation within the policy year.I am an IFA. Any comments made on this forum are provided for information only and should not be construed as advice. Should you need advice on a specific area then please consult a local IFA.0
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Any sign of health issues that might affect life expectancy? A Scheme Pension can pay out more than Capped Drawdown but the costs involved in having an actuary producing a custom plan mean it's unlikely to be cost-effective for a pension pot below £50,000, more likely over £100,000 and higher.
Is income anywhere near to £20,000, when Flexible Drawdown might allow taking as much as the relative likes? Sometimes buying a low value level annuity or deferring the state pensions for a year or two can be enough to get over £20,000 and allow this. You can defer once even if you've started taking the state pensions.0 -
It's based on the policy years, which will normally run from the date that the first crystallisation event occurs
Oooo, lovely, Pension Input Periods to worry about on the way in and Policy Years on the way out. Bliss!I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
It gets to be even more fun if you use staged drawdown and have multiple arrangements in the same scheme, possibly each with its own year and GAD calculation...
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Plain old tax years are in there too, as the income is taxed in the year it is received but tested against the policy year when calculating how much can be withdrawn.gadgetmind wrote: »Oooo, lovely, Pension Input Periods to worry about on the way in and Policy Years on the way out. Bliss!
Pension "simplification" worked wonders!
I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
Plain old tax years are in there too
Yup, I have that fun with input periods. Contributions reduce your income in the tax year but all plop into your pension on the same day for allowance checks.
This does allow some "games" but it shouldn't be this complex.Pension "simplification" worked wonders!
Well, quite.
Whenever caught by these things, I'm reminded of the story of the steelypips.
http://kalantarian.org/artak/Literature/steelypips.htmI am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »Yup, I have that fun with input periods. Contributions reduce your income in the tax year but all plop into your pension on the same day for allowance checks.
This does allow some "games" but it shouldn't be this complex.
Well, quite.
Whenever caught by these things, I'm reminded of the story of the steelypips.
http://kalantarian.org/artak/Literature/steelypips.htm
very good - bit too close to the truth thoughI think I saw you in an ice cream parlour
Drinking milk shakes, cold and long
Smiling and waving and looking so fine0
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