Put in Lump Sum

Jobchange

I am well within my MPAA and this is my only pension. DC worth around £34k. Aged 60 and would like to access my TF amount and put rest in flexible drawdown.
I have a few thousand in a bank account, could I add this amount to my pension to get it topped up. So say I added an £8000 lump sum (well within my earnings) would the government top that up by 25%? I would then be planning to quickly access the 25% and put rest in income drawdown?

So then my 25% would be £10500 instead of £8500.
Any thoughts much appreciated!

Main thing is I need to be able to access 25% within next month or two.

Al.

If it's within your relevant earnings for the period, yes.

http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm05200060.htm

You could start a new pension and put in an amount that kept it within small pot regulations.

https://www.gov.uk/tax-on-pension/getting-taxfree-pension-income

The benefit to you might be (depending on your existing strategy) that your larger pot remains uncrystalised and unhindered (so called 'pound cost ravaging') by withdrawls. Downsides include not benefiting from compounding up, and possibly discounts not being extended to you which you may have received if you pot grows over a certain size.

Linton

Firstly on the practicalities...

1) You should in principle be able to do want you want
2) But whether it will all go through as quickly as you want could be a risk. For example your pension company may only pay out say once a month, your present pension may not support drawdown so you would have to transfer it elsewhere first.

Whether you should do it:-
1) There could be fees to pay which would counter the tax saving to some extent. Assuming you are on basic rate tax now and will be when drawing down the tax saving will be 20% of 25% of £8K = £400. Published fees for arranging drawdown could be around £100 with subsequent fees of £100/year.

2) Have you planned your income and expenditure during retirement? Will you be living solely on State Pension and the small amount from the £34K? £34K could give you an steady inflation proofed income of say £1200/year before taxes and fees. If you are in this position perhaps it would be better to try living on say £8K/year and put further income into your pension.

Jobchange

Thank you for replies!
Yes I will be in 20% tax bracket. They do offer flexible drawdown.
There will be other sources of income apart from this and state pension.

Just seems like a good way to increase this much needed TF lump sum whilst retaining some form of pension.