Armydilllo Strategy

ArmyDilllo

• You get an automatic 20% (min) contribution from the Govt., on any taxed income you contribute, so you're already up.
• You can take 25% tax-free when you decide to withdraw it, providing your total taxable income is within your basic rate tax band. If you go over you pay at the higher rate tax band. Don't forget you also get a personal allowance of currently £11k tax-free anyway.

Although I am already retired, I have not started using my personal pension.
So I will be contributing the remainder of the taxable income I have earned this year into it (under the £40k limit).
This will recover the tax paid on it and increase my allowable income by 25% (due to the 25% tax-free portion).


Happy for anyone who thinks I could improve my plans to chime in and offer advice.

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Dird

Oh OK, I guess I'll do the 4+4 if I get the new job. The reason I don't like LISA/pension so much is how they force you to wait & with the earliest penalty-free withdrawal age only rising

ArmyDilllo

Dird wrote: »

The reason I don't like LISA/pension so much is how they force you to wait & with the earliest penalty-free withdrawal age only rising

Yep.
But don't forget you don't have to wait until you're able to use them.
I won't be able to draw my state pension for another ten years and I'm not waiting that long to retire.
I have other savings I can replace that amount until I can.

There are great benefits to pensions and now LISAs.
I personally believe I can get more from other investments but I have not neglected my pensions.
I use them to get the tax-free benefits and tax refunds.
Unfortunately I can only get 25% tax-free from a pension, whereas I can get all of an ISA free of tax.
I seem to be growing ISAs better than my pensions and I have a longer growth period/potential with them too.

ArmyDilllo

I should add that this year is the most important as far as my personal pension is concerned;
I can add to it (up to my contribution limit) and get a free 25% top-up from that nice Mr Hammond.
What a very nice man.


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