Tax Free Savings / AVC or similar

fjh

Looking to take pension ( Final salary scheme) at 58- when I will have 43 years in ( enhanced) but carry on working if possible till 63
Total income with Pension would thus be £60k+ pa

Work for large PLC, once Final salary Pension drawn 15% funding for pension then paid with salary .
The other plan is a Retirement savings plan- run by the PLC which I can use almost as a savings plan but with Pension status
Have a wife who has small pension app £2500pa 5 years till state pension age , 2 children in 20's both working in their own pension schemes

Ideally I would like to be able to pay into this new Pension BUT at 63 draw all in cash - accept this may 'fantasy' but if I cannot do this could I do via other schemes?


been told whatever I put in I can only take 25% in cash at 63 then buy annuity with balance which I don't wish to do.

As I would already be drawing a pension are any other options available to me? or could I do anything myself that would be tax efficient rather than pay 40% tax on pension?

Many thanks

atush

First of all be more forthcoming with actual facts.

Who do you work for, what is your pension scheme? In particular, AVCs are a very mixed bag- some are great (lgps?) others ignore in favor of a PP or Sipp.

Look at the new second scheme. Does the employer pay in? How much? If you are working, and receiving a pension income you don't need- that is being taxed at 40% then you need to put that income into another pension. which pension would need at least the above Qs answered (along with if you have a spouse and/or dependents.

fjh

atush wrote: »

First of all be more forthcoming with actual facts.

Who do you work for, what is your pension scheme? In particular, AVCs are a very mixed bag- some are great (lgps?) others ignore in favor of a PP or Sipp.

Look at the new second scheme. Does the employer pay in? How much? If you are working, and receiving a pension income you don't need- that is being taxed at 40% then you need to put that income into another pension. which pension would need at least the above Qs answered (along with if you have a spouse and/or dependents.

I have updated my post with additional info- look forward to gaining help

atush

What is your projected annual pension at Scheme age?

At any time, if you are earning 20K or more in secure pension income you qualify for Flexible Drawdown. This 20K can include the state penbsion.

So say you get 15K per annum pension now, then another 5-7K in state pension later. when that happens you could change from capped DD on your pension pot to flexible and draw as much as you like. Bear in mind if you draw to muchg you'll pay HRtax on it.

Another option is to pay more into your OH pension, as at 2500 pa, she wont be using all of her personal allowance even once she gets to SP age. If you have unwrapped investments/savings that pay an income then these could go into her name as she will pay less in tax than you.

fjh

if i draw pension at 58 it would start at 26,500 pa with increases linked to RPI

kidmugsy

fjh wrote: »

Looking to take pension ( Final salary scheme) at 58 ... but carry on working if possible till 63

Why? It'd be more tax-efficient to draw it when you are not earning pay.

It might be worth it if you expect to die young, of course.

fjh

A number of reasons:- possible fortcmonh changes per Pension review which might change when I can draw pension, Pension rules already changed in past 18 months that 'went against me' but also looking forward in all scenario's projected to age 85 taking Pension at 58, carry on working till 63 provides the 'most income' but ideally don't want to pay 40% if I can avoid- idea would be to 'save' Pension up then If i could take as cash pay off Mortgage / Credit card debt - If I cannot find way not to pay 40% tax on pension use the money straight away to pay down debts

atush

if your pension is over 20K, which it is, all extra income into a ew pension would be boosted by 40% and then you can take 25% tax free plus the rest as you like.

You WILL qualify for flex DD.

fjh

atush wrote: »

if your pension is over 20K, which it is, all extra income into a ew pension would be boosted by 40% and then you can take 25% tax free plus the rest as you like.

You WILL qualify for flex DD.

Thanks would I be able to take the 'other' 75% as cash or could I just draw the income from what it was invested in?

atush

You could take it as cash, but do be aware it is taxed asd income. sO it would be best to draw it after you stop working, and drawing enough but not too much so that you stay a Basic rate taxpayer. Take into acct unwrapped interest/income in your total figure.