Retirement drawdown question

green.lander_2

Hello, i am nearly 59 and would like to semi retire in the next 6 months or so as work is very stressful.

I have full SP at 67, a deferred DB scheme projected to be £28k at 65 and a old DC pot of around £110k. The DC pot has a terminal bonus and guarantees so don't really want to touch this or take DB early. Wife is still part time working. Minor credit cards no other debt.

What i do have is around £250k in my existing company DC plan. Ideally i would get a small part time job say £6k so my plan is to take the maximum tax free this year (£60k) for home improvements and every April perhaps drawdown around £35k depending on life plans.

Need to transfer this to a SIPP and would it be best to move this into "cash" in the SIPP to make it easier? Any issues to consider? tax?

Thank you

Linton

Old DC pensions may well not support drawdown whereas modern ones may. So check with your scheme and if it does not support drawdown you can transfer it to an online SIPP which does. You may want to transfer to a SIPP anyway because of the good online facilities and the broad range of investments. Transferring DC pensions assuming they have no guarantees is easy - just ask the receiving scheme to arrange a transfer-in,. much like what happens with an ISA. There are no tax issues.


One aspect you may wish to look at is that by the time you get your SP, DB pension, and take your old DC pension you could be into higher rate tax. If so, unless you are using the current DB pension for inheritances, it would be tax efficient to ensure you drain it before then - take as much as you can up to the top of the Basic Rate Tax Band and put any excess cash into an S&S ISA.

Albermarle

Need to transfer this to a SIPP

Depending on your provider , there could be the possibility to just transfer to a newer version of your current personal/workplace pension. If so that could be a good alternative to a SIPP, especially if your employer has negotiated a good deal, which you can sometime still benefit from even after you leave.

would it be best to move this into "cash" in the SIPP to make it easier?

If you mean make the actual transfer in cash , then probably yes and you may have no choice.
If you mean keeping it in cash long term then that is another discussion.