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Pension dilemma
Comments
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Hi NoMore,
Yes that’s what I am told but as you say no confirmation that it needs to be a lifetime annuity so still no idea why such a restriction.0 -
I’m having a bit of a rethink on all this now and have looked at extracting the whole AVC out into a SIPP.
By my calculation I would be £18k worse off in terms of tax as extracting it means I don’t then have it associated with my DB pension and I would have a smaller tax free lump sum (£98k lump sum from pension and (£225k / 4 ) but I think I really don’t need any more than that.
The benefits however are that I would have much more flexibility of access to funds which can in the main remain in the pension to grow and a larger inheritance for my kids outside of my estate. Given I am unlikely to extract it all prior to it becoming an inheritance then I won’t actually incur a lot of that £18k tax hit.
Does anyone think I would be making a poor move? Giving up the benefit of a much larger tax free lump sum seems to be the wrong thing to do but the other benefits seem to be good too.0
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