It's time to start digging up those Squirrelled Nuts!!!!

MetaPhysical

I am not retired [yet] but I'm very much of the "bird in the hand" mindset and thinking of taking all my tax free cash now, rather than phasing it with UFPLS.  I would much rather do UFPLS over the coming years but cannot risk a new  government abolishing tax free cash on a "the broadest shoulders must bear the load" agenda and me losing that once in a lifetime ability to take a large lump sum for my future.  Another example where political tinkering and uncertainty causes real world effects on working people's plans.

NoMore

MetaPhysical said:

I am not retired [yet] but I'm very much of the "bird in the hand" mindset and thinking of taking all my tax free cash now, rather than phasing it with UFPLS.  I would much rather do UFPLS over the coming years but cannot risk a new  government abolishing tax free cash on a "the broadest shoulders must bear the load" agenda and me losing that once in a lifetime ability to take a large lump sum for my future.  Another example where political tinkering and uncertainty causes real world effects on working people's plans.

You were told in no uncertain terms in your previous thread (now deleted by looks of it) by everybody who replied, that no government will remove the TFLS in its entirety. If you choose to make decisions on made up fantasies in your head, that's up to you, but its not how I would go about it.

As you were told previously, it wouldn't raise much tax, it would be politically dangerous as everybody with a pension benefits from TFLS, not just the wealthy. Without the TFLS, lower paid lose the benefits of Pension saving, while wealthier can still take advantage of contributing and then withdrawing at different rates. That's why its much more likely they will tinker with the upper limits, not removing it all together.

kempiejon

MetaPhysical said:

I am not retired [yet] but I'm very much of the "bird in the hand" mindset and thinking of taking all my tax free cash now, rather than phasing it with UFPLS.  I would much rather do UFPLS over the coming years but cannot risk a new  government abolishing tax free cash on a "the broadest shoulders must bear the load" agenda and me losing that once in a lifetime ability to take a large lump sum for my future.  Another example where political tinkering and uncertainty causes real world effects on working people's plans.

But the government have not abolished tax free cash. In fact we've not got the government and although that might be a foregone conclusion, the loss of the tax free 25% is not. Even if it is an action that comes to pass it would not be instantaneous. No one has lost the once in a lifetime ability. Still different circumstances will inform different decisions and I think it is tax advantageous to take a portion of your 25% each year but you do what suits you even if generally not the most tax efficient.

Sea_Shell

Well I'm almost at risk of not being able to access my 25%, due to "tinkering" with the ages.

So I'm taking it at as soon as I'm 55.

MallyGirl

Sea_Shell said:

Well I'm almost at risk of not being able to access my 25%, due to "tinkering" with the ages.

So I'm taking it at as soon as I'm 55.

That I can totally understand

kempiejon

Sea_Shell said:

Well I'm almost at risk of not being able to access my 25%, due to "tinkering" with the ages.

So I'm taking it at as soon as I'm 55.

I'm not sure what I would think in the same situations. I think removal of 25% couldn't come without announcement. Similarly moving to a later date would have lead time and as you can't change your birthday you'll either be old enough to access it if changes are suggested or too young to do anything about it. It would be massively frustrating if a year out it gets moved to another year out etc.

Pat38493

Sea_Shell said:

Well I'm almost at risk of not being able to access my 25%, due to "tinkering" with the ages.

So I'm taking it at as soon as I'm 55.

I have also pulled the TFC out of my largest DC pot.  My thinking is that this provides more flexibility for various options in terms of tax planning, when to put DB pension into payment and so on.  At the moment the TFC is re-invested into ISAs, wife's SIPP and Various fixed term savings accounts.

My main plan calls for me to put my DB pension into payment at 56, and I also need to buy a car, but in reality having that cash means I have the option to delay the DB for a year or two depending on the investment returns i.e. if it's a bad year i can take my DB pension with some or all PCLS to avoid taking too much crystallized losses.

The only downside is if we succeed in selling the house to downsize, I might not be able to avoid paying some tax on the interest for a year or two but it's a nice problem to have.

DT2001

I cannot see the 25% TFLS being done away with . It is already limited to £268k (in most circumstances) and is part of many people’s plans.

The decision is like most things to do with retirement down to individual’s circumstances. I have 3 ‘pots’ with the same platform and so could take the 25% of each over time to utilise the ISA limits and therefore protect my tax free growth but this would then be potentially subject to IHT.

I am of the opinion that you should make decisions based on the current tax rules as sometimes changes work in your favour (George Osborne’s realignment of pension dates in 2015 allowed me to put a larger lump sum into my pension and avoid paying HRT for the only time in my life!) and you usually have time to mitigate those that are unfavourable.

MetaPhysical

NoMore said:

MetaPhysical said:

I am not retired [yet] but I'm very much of the "bird in the hand" mindset and thinking of taking all my tax free cash now, rather than phasing it with UFPLS.  I would much rather do UFPLS over the coming years but cannot risk a new  government abolishing tax free cash on a "the broadest shoulders must bear the load" agenda and me losing that once in a lifetime ability to take a large lump sum for my future.  Another example where political tinkering and uncertainty causes real world effects on working people's plans.

You were told in no uncertain terms in your previous thread (now deleted by looks of it) by everybody who replied, that no government will remove the TFLS in its entirety. If you choose to make decisions on made up fantasies in your head, that's up to you, but its not how I would go about it.

As you were told previously, it wouldn't raise much tax, it would be politically dangerous as everybody with a pension benefits from TFLS, not just the wealthy. Without the TFLS, lower paid lose the benefits of Pension saving, while wealthier can still take advantage of contributing and then withdrawing at different rates. That's why its much more likely they will tinker with the upper limits, not removing it all together.

I never got chance to read the replies in that thread since it got taken down as political when I never intended it to be as such (nor do I intend my posts here to be either).  I was just expressing a legitimate pension concern that could be potentially very impactful to many people.
Let's hope the 25% TFC remains.

Pat38493

DT2001 said:

I cannot see the 25% TFLS being done away with . It is already limited to £268k (in most circumstances) and is part of many people’s plans.

The decision is like most things to do with retirement down to individual’s circumstances. I have 3 ‘pots’ with the same platform and so could take the 25% of each over time to utilise the ISA limits and therefore protect my tax free growth but this would then be potentially subject to IHT.

I am of the opinion that you should make decisions based on the current tax rules as sometimes changes work in your favour (George Osborne’s realignment of pension dates in 2015 allowed me to put a larger lump sum into my pension and avoid paying HRT for the only time in my life!) and you usually have time to mitigate those that are unfavourable.

Bit of an aside but are you saying you have 3 separate pension accounts with the same provider in your name?  I didn't think that DIY providers allow that.