Redundancy & new pension rules

mightyhammer

I am being made redundant & expect a final amount of approx 70k. Hopefully I will find work after this & therefore potentially a tax bill of 40% of 70-30=40k.

I am 53 years of age. Over the years I have accumulated 3 pension pots. An old private contracted out plan, a DB plan from a previous employer & my current employers plan.

I dont want to tie up all of my redundancy long term - but a couple of years wait would be acceptable.

Therefore I am wondering if its feasible to pay in my 40k taxable from the redundancy into a oneoff AVC into my current employers plan and then "retire" at 55 , take the lump sum out of my current employers pot & use the rest of that pot as a long term drawdown pension - leaving the other two pots & my state pension untouched until I properly retire at 68 ?

Does anyone know if this is feasible ?

Linton

In principle yes, it is a sensible way of managing the gap between stopping work and getting access to all your pensions. But how you do it may be driven by the rules of your current pension which I assume is a DC pension. So for example you may have to transfer the current employers pension into a private personal pension or SIPP before taking drawdown.

As of right now one problem is that you will be limited as to how much you can drawdown each year - it may not be a sufficiently high % to meet your needs. However if the Chancellors proposals are implemented that will not be an issue after April 2015.