Lump Sum, 25% of Pension Pot or 25% of Pension?

sea_quest

I currently have a good company pension and when I retire would like to take a lump sum for a large purchase.
If I set up a SIPP, can I use this to take a lump sum equal to 25% of my total pension pot, i.e. Company + SIPP, thus leaving the favourable company pension untouched, or am I restricted to taking the 25% lump sum as 25% of each pension?
The return from my company pension is much better than I could buy with an annuity so I am keen to protect it.
Thanks for reading.

greenglide

You can take up to 25% of the value of each plan.

Are you planning to pay into the SIPP and then at a later date withdraw all of it as a lump sum which will be 25% of your total pension savings? You cannot do this.

Many company schemes allow you to pay AVCs and this money can, often, be used to fund the lump sum from your employers scheme.

You would need to check whether the scheme does this. This is the valuable bit of AVCs :-)

xylophone

http://www.hl.co.uk/pensions/income-drawdown/what-is-flexible-drawdown

http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm09103600.htm

When do you become eligible for State pension? See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf if after 6 April 2016.

sea_quest

Thanks folks. It looks like AVCs are the way forwards if I want the tax efficient route to a lump sum and some protection of my annual pension.