Drawdown Pot withdrawals - avoid having to reclaim tax

garmeg

MEM62 said:

justintime99 said:

However, I want to take extra from the drawdown pot each year so my taxable income will be just under the 40% bracket (so £50k this year). Cash will be used to live on and pay into ISA.

Appreciate I am late to the party here but there is one thing that I cannot get my head around.  You are proposing to to take money from your pension, where is sits inside a tax-wrapper, loose 20% of it and put it in an ISA.  ie Taking £100 out of your pension pot to put £80 into an ISA.  I am struggling with the logic there.     

Dont know how big the OP's SIPP is but he has used 33% LTA on his DB pension, so it may make sense to draw down the basic rate tax allowance from the SIPP if there is a risk of paying an LTA charge at 75 if he doesnt draw down enough. The SIPP will never be withdrawable tax free due to his state pension and DB pension, so at best 20% tax on it whenever he withdraws so may as well top up the ISA with excess funds up until it is actually needed.