Missus fed up of work.

TESCOBABE56

TESCOBABE56 wrote: »

My thanks to Jamesd and others.

My thinking now is
Take £11000 lump and £1650pa

Open the wife a personal pension (Hargreaves Lansdown ?)
Pay in £2880 this year, £720 added by government.
Then, in 17/18 the wife can draw, tax free, £3600(ish) from HL, and £1650 from her deferred pension.
That gives her £5250 pa.

Now I've festered it appears the strategy above requires six years @ £2880 from somewhere = £17+k to be found (after the £11k), the benefit from this, over the £60k transfer value being burnt over ten years, is a £1650 pension ongoing from 67.
We much prefer £60k giving £6k a year for a decade, as we can get her SRP to max.

Nationwide8

kidmugsy wrote: »

I'm a fan of HL but they are (or were) too expensive for this stratagem in its entirety: they have an extra charge if you close your account too soon after opening. Alternatively you have to leave £1000 (do check!) behind and then there's no extra charge. .

Am just getting into the SIPP idea at over 55 on another thread ( Paying £2880 into a SIPP when retired ) ..Sorry to repeat but basically you need to leave £1000 in the SIPP to avoid an extra charge than say if you left £300-400 in it ?

jamesd

TESCOBABE56 wrote: »

Now I've festered it appears the strategy above requires six years @ £2880 from somewhere = £17+k to be found (after the £11k), the benefit from this, over the £60k transfer value being burnt over ten years, is a £1650 pension ongoing from 67.
We much prefer £60k giving £6k a year for a decade, as we can get her SRP to max.

There's no extra 2880 needed each year since it is being recycled each year. Pay in the 2880, take out the 2880 plus the free extra 720.

So the income ends up being the 1650 plus the 720 plus the 11000 divided by ten years, 1100. So a total of 3470 a year.

jamesd

Nationwide8 wrote: »

Am just getting into the SIPP idea at over 55 on another thread ( Paying £2880 into a SIPP when retired ) ..Sorry to repeat but basically you need to leave £1000 in the SIPP to avoid an extra charge than say if you left £300-400 in it ?

Not quite. If the balance goes below 1k they are allowed to close the account. If the account is closed in the first year there is a closure charge. Allowed to doesn't mean that they will, just that they can.

But it never has to go below 1k. You will be paying in during the second tax year, with that into a different account. You can take the 25% tax free from that part way through the year and the 75% will be moved to the account you're taking money out of. The easiest way is regular monthly payments in and out because it is unlikely that they would close the one you are taking money out of while you are paying into another.

TESCOBABE56

jamesd wrote: »

There's no extra 2880 needed each year since it is being recycled each year. Pay in the 2880, take out the 2880 plus the free extra 720.

So the income ends up being the 1650 plus the 720 plus the 11000 divided by ten years, 1100. So a total of 3470 a year.

I agree. But, I'm trying to get to £5200+pa.

£60k transfer value is £6k pa for a decade plus £720pa (assuming she draws £9600 and recycles £2880)


The option of £11k plus £1650 means I have to add £17k (this means the £1650 continues ad infinitum)