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sunrise27_2

xylophone wrote: »

He has a DC pension valued at £88,000?

Does the plan support drawdown?

If so (he could transfer to a drawdown provider if not), he could simply take the 25% tax free PCLS and leave the balance invested?

He could use £18,000 as required and the balance to pay for the family holiday?

And he should remember that if he takes anything over the PCLS from his DC pension he will need to have regard to the MPAA.

https://www.pensionsadvisoryservice.org.uk/news/the-money-purchase-annual-allowance-is-dropping-to-4000-how-does-it-affect

He could consider continuing to contribute to the drawdown pension ( he should contact HMRC if he is due more tax relief as a higher rate tax payer) with a view to being able to fully retire or perhaps reduce to a three day week) before state pension age?

I really really appreciate your help And advice but don't really understand half your answer sorry lol

xylophone

And I am sure our financial advisor has talked about draw down , I just assumed that once you take the lump sum you have to take the yearly payment ?

Not in a drawdown plan.

https://www.moneyadviceservice.org.uk/en/articles/income-drawdown

Surely your financial adviser has explained the type of pension that your husband has?

sunrise27_2

What if we waited until September 2020 to take his pension meaning the main part of the mortgage would be paid off and then the £18000 could be paid off the £30000 interest only it ? Then the pension wouldn't be eaten up by tax as he will then cut down to four days a week ? But then from August 2019 to August 2020 we will be paying interest on the mortgage repayments instead of paying the £18000 off and reducing our repayments , sorry for all the questions my mind is working over time at the moment

sunrise27_2

xylophone wrote: »

Not in a drawdown plan.

https://www.moneyadviceservice.org.uk/en/articles/income-drawdown

Surely your financial adviser has explained the type pf pension that your husband has?

He has but I haven't really taken it all in as we weren't really thinking of taking it all for about 12 years , I'm sure he said you could buy an annuity which allows drawdown but not sure but we've definitely talked about drawdown as an option

xylophone

But what kind of pension is it, Defined Contribution or Defined Benefit?

https://www.moneyadviceservice.org.uk/en/articles/defined-contribution-pension-schemes

https://www.moneyadviceservice.org.uk/en/articles/defined-benefit-schemes

xylophone

https://www.pensionwise.gov.uk/en

There is some information in the above. Your husband could book an appointment if this is a DC pension.

Is your FA a qualified Independent Financial Adviser?

https://directory.moneyadviceservice.org.uk/en

sunrise27_2

xylophone wrote: »

But what kind of pension is it, Defined Contribution or Defined Benefit?

https://www.moneyadviceservice.org.uk/en/articles/defined-contribution-pension-schemes

https://www.moneyadviceservice.org.uk/en/articles/defined-benefit-schemes

Its a defined contribution pension

sunrise27_2

xylophone wrote: »

https://www.pensionwise.gov.uk/en

There is some information in the above. Your husband could book an appointment if this is a DC pension.

Is your FA a qualified Independent Financial Adviser?

https://directory.moneyadviceservice.org.uk/en[/QUOTE

And yes he is fully qualified it's just me that doesn't understand it all

AnotherJoe

Sunrise, "PCLS" = Pension Commencement Lump Sum = TFLS = Tax Free Lump Sump

enthusiasticsaver

Your husbands pension will be a lot lower by taking it 10 years earlier. Have you got quotes for forecasts if he takes it at 60 and 65?

Do you have other savings or investments or is it just the small fairly recent pensions you mention?

Surely if your husband is on higher rate tax and you have just your state pensions and this small £2.5k per annum one that is going to be a massive drop in income from £40k+ to around £18k? Even if your mortgage is repaid by then will that be enough to live off?

I think what you suggest re putting the pension into your husbands nest pension may be classified recycling which is not allowed although technically you could pay £2.5k of your income in which would be ok.

I think you should definitely get figures for delaying your plans given your retirement provision is quite low and you still have £48k of mortgage outstanding. Is selling the house and downsizing an option? If you did that and repaid the mortgage you could then drop a working day each and not take such a punitive hit on your husbands pension and it would mean better provision for later. You could then perhaps take it when he is 60 and drop a further day.