Pension pot target

dunstonh

If you get a £400k pot you'll withdraw £100k tax free. Using your £12k a year target, this funds you to age 75.

Although phased flexi access drawdown could well be better option than full drawdown unless there is a specific reason to draw so much money in one go.

zagfles

dunstonh wrote: »

Although phased flexi access drawdown could well be better option than full drawdown unless there is a specific reason to draw so much money in one go.

Indeed - and although "phased flexi access drawdown" sounds complicated, it really isn't. It just means taking benefits from part of your pot, not all.

For instance, with a £400k pot. You "crystallise" £100k of it, leaving the other £300k untouched (uncrystallised). You take a £25k tax free lump sum from the crystallised part and leave £75k in drawdown, from which you can take taxed income when you want.

The other £300k is like a separate pot which you do what you like with later. So eg you could do the same with another £100k later.

Alternatively you can take UFPLS's, this is where you take a lump sum out of an uncrystallised pension and get 25% of that lump sum tax free and pay tax on 75% of it. For instance take £20k out, £5k is tax free and £15k is taxable. Usually not a good idea to take big lump sums out this way as you'll get taxed on 75% of it which could push you into higher bands of tax.