Flexible drawdown pension

bostonerimus

Shug159 wrote: »

3 or 4 % is ok. If I take £80 per week out of the bank , it's tax free. After taking a 25 % lump sum , is the drawdown not taxable ? On top of my pension.
Downsize my home will free up maybe 100 k
Thanks for all the comments.

You seem to be thinking of your savings as just capital to spend and not trying to come up with a simple plan to grow the money a bit to provide you with more income fro a longer time. At age 65 and married you should be planning for at least 30 years so you need some growth from your capital. Could you answer these questions.

1) How much is your weekly spending budget?
2) Is the £70k in the bank just in cash or is it invested in something?
3) What do you plan to do with the 25% TFLS?
4) How and where is your drawdown pension invested.....what are the fees?

dunstonh

Your right I was going to put it in the bank or isa

In which case, look at phased Flexi-access drawdown then. This is where each payment you draw (as income or ad-hoc) has 25% tax free and 75% taxable. You dont draw the whole 25% up front.

Your pension, whilst invested is tax free and outside of the estate. If you die before 75, the whole value is paid out tax free. The pension is likely returning in excess of 5% p.a. So, taking it out of a tax free pension and putting it into savings earning 1% doesnt appear to be a good idea.

3card

LHW99 wrote: »

If your wife is only short of a few years for state pension, using some of the TFLS to buy her extra years could be good value.
Get her to check her record as xylophone says.

Im sure the 'buy back' option is now closed

kidmugsy

If you want to get a bit more out of the pension tax-free, consider suspending ("deferring") your state pension for a couple of years. When you restart it you'll get an extra 5.8% for each year of deferral. It's not wonderful value, but the idea is handy for someone who wants to avoid tax. Given your motive, you'd invest the extra money into ISAs and pension contributions for your wife.

LHW99

Im sure the 'buy back' option is now closed

I had assumed the OP's wife had not yet reached SPA and that she could therefore either purchase post 2016 years or make voluntary (class 3?) contributions to build up a couple of extra years if very close to a minimum qualifying amount.