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What would you do?

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Age 70 last November my wife has flexible drawdown with Halifax Life. She put the full value of her fund into their money fund to avoid any stock market losses (good job considering recent fluctuations). Halifax have told her they will not handle her account after age 75. Since her retirement she has taken just enough income from her plan so added to her state pension, her small NHS pension and savings she has not paid any tax. We estimate that if she does the same for the next four and a half years she will have in excess of £25000 left in her account. She has no interest in buying an annuity at 75 and would rather deplete the fund to nil, so one choice seems to be to take income now of £7,200 pa, pay tax of about £733 but not pay tax on her savings, this will leave about £13,500 at 75 which if she took out in one lump would attract 40% tax. Second choice would be to divide the fund up, withdraw enough each month to deplete the fund at 75 but pay tax on her savings as well as her drawdown. She already has ISAs and regular savings with our current account and any excess income would be going into low interest savings accounts! What would you suggest?


Replies

  • PennyForThem_2PennyForThem_2 Forumite
    662 posts
    Tenth Anniversary 500 Posts Combo Breaker
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    You would be better posting on Pensions thread.

    I would also advise breaking the text upinto paragraphs as it is very difficult to read and understand in one big paragraph.
  • Savvy_SueSavvy_Sue Forumite
    41.8K posts
    Part of the Furniture 10,000 Posts Name Dropper
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    You would be better posting on Pensions thread.

    I would also advise breaking the text upinto paragraphs as it is very difficult to read and understand in one big paragraph.
    It might also be a good idea to get some independent financial advice, because in that situation someone will go through all your assets, your attitude to risk, your future plans etc etc etc. And they will also know what all the options are and be able to suggest those that match your needs and aspirations. 
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  • squidlydiddly2squidlydiddly2 Forumite
    16 posts
    Sixth Anniversary First Post Combo Breaker
    You would be better posting on Pensions thread.

    I would also advise breaking the text upinto paragraphs as it is very difficult to read and understand in one big paragraph.

    After rethinking we did also go to the pensions thread, sorry if I gave you a headache!
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