IFA recommended transferring DB pension to SIPP

Linton

So you may conclude that a guarantied income to cover the risk that your btls fails to deliver is more important than extra cash in the pot.

Thrugelmir

Terron wrote: »

Besides the properties in my own name (current LTV ~40%) I have some properties in a limited company (LTV near 75%). I haven't been taking income from the company so far., partly because I was reinvesting originally, and partly due to a bad tenant costing about £10k. and wiping out last years profits, I plan to start paying a director's pension to move the profits into the SIPP tax free.

As and when interest rates normalise will impact profitability.

Likewise tax changes from April 2020 are worth looking into to see what impact there might be if any.

Then there's a risk of a Corbyn led Government.

Terron

Thrugelmir wrote: »

As and when interest rates normalise will impact profitability.

Likewise tax changes from April 2020 are worth looking into to see what impact there might be if any.

Then there's a risk of a Corbyn led Government.

It would likely be a while after interest rates normalise when the fixed rate periods expire and I have to remortgage. I am also looking to increase the number of mortgage free properties I have.

I am not aware of any tax changes that would have an effect starting in April 2020. If you mean the reduction in mortgage interest relief that will come fully into effect in April 2020 it hasn't affected me so far as a basic rate tax payer.. It might do so if my income goes up enough that I become a higher rate taxpayer. That is why I am trying to reduce the mortgages in my own name. Companies aren't affected, but they get less relief anyway.

Corbyn is a risk, but since housing policy is devolved there is a fair chance of EVEL stopping him doing anything to bad.

Terron

Linton wrote: »

So you may conclude that a guarantied income to cover the risk that your btls fails to deliver is more important than extra cash in the pot.

That was my plan, until the last meeting with my IFA caused me to reconsider.

Terron

Thanks for all the responses.


I think I will go with taking the pension,


Either way I will have enough money. If I transfer it I will have to ask to take some of the transfer money out to spend it. If I take it as a pension it will go into my bank account and be immediately available to spend. I have a tendancy to save - that's how I accumulated so much. By having the money go into my bank account I will be more likely to spend it, and thus hopefully end up with a better life.

Malthusian

Terron wrote: »

By having the money go into my bank account I will be more likely to spend it, and thus hopefully end up with a better life.

A very rational decision. Contrary to popular belief, the most common problem with drawdown funds is not people running out of them but people never spending them in fear of running out.

Guaranteed lifetime income eliminates this problem, and in the case of DB pensions, very cheaply.