Drawdown after lump sum .

AnotherJoe

Bobbyg77 wrote: »

Ok I,m just over 61.the pot is worth over 50k.now fully retired.so taking out the money at the annual tax allowance rate ie 11.8 k per year.which without interest should last to 65 +.i would like to invest the money in a no risk savings in section ie.10 over 4 years,10 over3 years etc you see my plan .but what products are there .for a sip.

There are very few if any. I have read that some SIPPs let you save cash in a linked bank account but yours isn't one of those (neither is mine) and I dont know which ones are.

Audaxer

Bobbyg77 wrote: »

Ok I,m just over 61.the pot is worth over 50k.now fully retired.so taking out the money at the annual tax allowance rate ie 11.8 k per year.which without interest should last to 65 +.i would like to invest the money in a no risk savings in section ie.10 over 4 years,10 over3 years etc you see my plan .but what products are there .for a sip.

I see what you are trying to do, but bear in mind that you are already gaining a lot by managing to take all your SIPP money tax free. I don't think there is any way to keep that £50k capital absolutely safe for 4 years, and at the same time gaining decent interest on it inside the SIPP. I think the best strategy would be to take the £11.8k each year as a lump sum and put it in the highest interest current account(s), paying yourself monthly from that. Then you are at least getting some interest on the £11.8k each year until you spend it monthly.

Bobbyg77

Hi i,m looking for a fair rate not for a big interest. Rate,but how can they charge you for keeping 50k of your money.maybe this could be a ppi for the future.i feel it's just the government looking after there own.has anyone invested in bonds rather than keeping it in cash.open to all ideas to beat the system.

Bobbyg77

Would you pay tax on the 11.8 k as soon as you take it only to have to claim it back later?.

xylophone

how can they charge you for keeping 50k of your money.

HL does not charge for holding cash.

AnotherJoe

And neither, effectively, does Aviva from what the OP reported.0.41% interest, 0.4% charge. = 0.01% interest. Not a charge.

OP keep it as cash, over just 4 years inflation losses won't be too bad. Unless you want to take a risk with some.

There is no such thing as a risk free option..

Bobbyg77

I see the plus side of taking the total tax allowance of 11.85k say April 10,but would they take 20% in tax at that time only for me to have to claim it back in the next tax year.?

Dazed_and_confused

No, on your first payment the emergency tax code should be used, on a non cumulative basis.

If you had done this in April 2018 a taxable amount of £11,850 would have had tax deducted of £3,769.40.

Refund of any excess tax can be claimed from HMRC.

NorthernGeezer_2

It can be worth deferring your SP to fully drawdown a D.C. pot at minimum tax with excess going into S&S ISAs. This also gives you extra inflation linked income which could be very useful in extreme old age.

Any idea on the maths with this scenario?
Does your deferred SP rise by a set amount per week year on year?

Dazed_and_confused

Google is your friend

https://www.gov.uk/deferring-state-pension