Pension question

hayleydaley

i have pensions of
£25000
£10000
£5000
With the new changes coming in next year to pension drawdown.
Just wondering whether to draw down on the smaller pension so that it will come in this years tax drawdown . Then I can drawdown on another one next year. As I understand it is only one drawdown per tax year.
Thanks
Merry Christmas and a peaceful New Year

PeacefulWaters

As I understand it is only one drawdown per tax year

I must have missed that. Do you have a link?

For me there are two key things to consider before drawing down.

1) Do I need the money?
2) What's the most tax efficient way to withdraw it?

For point (2) utilising you tax allowance well would be the starting point. Then ensuring that alongside other income you don't inadvertently end up paying 40% tax.

Mrs PW will drawdown an amount equal to her tax allowance when the time comes. She'll have no other income so won't pay income tax again.

jamesd

You can put as many pension pots as you like into capped drawdown in a year. Probably best to transfer them before doing it so you only have one place to deal with.

atush

What age are you? Are you still working? When will you retire?

How and when to take pension money will depend on these things and others. And taking them the most tax efficient way is usually best

Thrugelmir

PeacefulWaters wrote: »

Mrs PW will drawdown an amount equal to her tax allowance when the time comes. She'll have no other income so won't pay income tax again.

Be interesting to see the charging structure for such personalised administration.

MoneySavingUser

Thrugelmir wrote: »

Be interesting to see the charging structure for such personalised administration.

Can you clarify what you mean?

Surely it is quite easy to work out how much the personal allowance is and tell the administrator to pay that much and pay the same as any other drawdown facility?

PeacefulWaters

Thrugelmir wrote: »

Be interesting to see the charging structure for such personalised administration.

It will. Especially in the fallout from capping management charges at 0.75% and reduced income from annuity sales.

I'm assuming one withdrawal a year should cost less than £20 with funds retained under management still providing income to the business managing the pot.

I'm hoping they'll be able to magic up a button on an online system that allows at least one free withdrawal every 12 months!

bigfreddiel

hayleydaley wrote: »

i have pensions of
£25000
£10000
£5000
With the new changes coming in next year to pension drawdown.
Just wondering whether to draw down on the smaller pension so that it will come in this years tax drawdown . Then I can drawdown on another one next year. As I understand it is only one drawdown per tax year.
Thanks
Merry Christmas and a peaceful New Year

With a total pension of £40k pa you have very little to worry about

fj

greenglide

bigfreddiel wrote: »

With a total pension of £40k pa you have very little to worry about

fj

I take that as being the pot sizes for DC schemes, not annual pension amounts for DB schemes.

A huge difference.

hayleydaley

not sure what you mean by nothing to worry about. With my pension pot. I am not working retired. No other income. Only from the sale of my house. How do I transfer it all in one pot . So I can drawdown. Oh bty the way I am 61

jem16

hayleydaley wrote: »

not sure what you mean by nothing to worry about. With my pension pot. I am not working retired. No other income.

Bigfreddiel thought you would have £40,000 per year as your pension.

Others are assuming you have 3 separate pension pots totalling £40,000 that you wish to take income from.

The 2nd is more than likely the correct one but perhaps you can clarify?

How do I transfer it all in one pot . So I can drawdown. Oh bty the way I am 61

You can transfer all the pots into one pot and then take a drawdown amount. If you are going to DIY, then you would need to find a provider that will allow you to drawdown. If you are not sure how to do this perhaps you should seek help from an IFA?

Is it definitely drawdown that you want to do or would you find an annuity a better choice if it's an income for life that you want?