£47K Pension Pot - Flexible Income D/down?

xylophone

however they phoned back saying that they could not offer a FAD anyway as my pot was less than £50k.

In which case if you want flexible access you will need to transfer to another provider.

Have you read this https://www.pensionwise.gov.uk/?gclid=CO321535-MwCFRHhGwodQZ8NBw

A face to face interview might assist with clarifying your options but if you need personal advice you will need to pay for an IFA.

http://www.thepfs.org/yourmoney/find-an-adviser/

And check the effect of drawing your pension on your benefits.

See post 3 above - a question on the benefits board might yield some guidance.

dimer

atush wrote: »

Have you checked if you will lose some/all of your ESA due to this new income?

looks like it would be slightly affected if i took regular £400 d/downs.

that is ESA will be affected by a private pension income of > £85/wk ie ESA will be reduced by half the difference between the weekly pension income & £85.

i'm assuming if i now take £340/mth d/downs I will avoid that?

thanks for all your replies.

xylophone

I would strongly suggest that you book an appointment with CAB and Pension wise before you do anything at all.

And as above, if your existing provider will not offer drawdown, you will need to transfer to a scheme that does.

Which will this be? And where will you invest the money within your scheme?

Are you able to decide for yourself or will you need advice?

Have you obtained a new state pension statement?

https://www.gov.uk/government/publications/application-for-a-state-pension-statement

xylophone

Another thought, if you take your PCLS, will this amount of capital have any effect on any other benefits you may be receiving?

atush

Yes, the capital you will have needs to be checked against limits.

Go to the CAB and get some help, but I think if you draw a low enough amount it may not affect your ESA. But having never drawn it, nor retired i am not sure. They will be.

Or the Benefits board might know- have you asked there?

jamesd

dimer wrote: »

that is ESA will be affected by a private pension income of > £85/wk ie ESA will be reduced by half the difference between the weekly pension income & £85.

i'm assuming if i now take £340/mth d/downs I will avoid that?

Have you reached your Pension Credit age yet?

After Pension Credit age you will be treated as having an income equal to the higher of the income you're actually taking or the amount an annuity would pay. So if the £340 a month is above the annuity level your thought would work.

To check the annuity level see what an annuity comparison site says you could get if you used the whole pot to buy an annuity at your age. Your health may complicate this because annuities pay out more to those with reduced life expectancy and I don't know how the rules provide for that, if at all. If I pretend that you are 60 years old and have no conditions that would reduce your life expectancy the £47,000 pension pot might buy a level annuity (no inflation linking) paying £2,228 a year, £42.85 a week. So a basic check suggests that your plan would work in this case as well, since it's not very likely in general that you'd get a large enough boost from reduced life expectancy to get it as high as £85 a week.

Before Pension Credit age there is no annuity comparison and you can take and have counted only what you actually take. Your plan would be fine for this case.

However, savings limits may be a bigger issue if you take the whole tax free lump sum at the start. Not a big deal, you just arrange to take benefits from the pension in several pieces so that the tax free lump sum never takes your savings above the limit. You'd end up with two pots, one the uncrystallised part you haven't taken the tax free lump sum and aren't taking income and the other the part where you've taken the 25% and are taking an income from.