When to drawdown?

Mick-H

Toying with what to do with my drawdown pension.
Last year I took £1000 per month keeping me well under the point where I would have to pay tax.
This year I'm leaving my money where it is until March 2021 at which point I'll draw out £12000.
Upside, leaving money in longer gives it time to grow more.
Downside, I'll probably get hammered for tax and will have to wait some time before I can claim that back. 
Would you/should I go the 1000 a month route or the one lump sum route?

ffacoffipawb

Monthly as it makes the tax easier.

Havent you got a big defined benefit pension that kicked in a few months ago?

TBC15

I’d draw out the maximum you could every month without paying tax. Put the excess into ISA.

Paul_Herring

Upside, leaving money in longer gives it time to grow more.

Or drop.

Albermarle

Upside, leaving money in longer gives it time to grow more.

You can just assume that . It might and it might do the opposite .

AnotherJoe

Monthly. Avoids the tax hassle. And as per TBC15 take out the max you can without paying tax. Why would you not do that ? It can always be reinvested if you don't  need it. 

Audaxer

Albermarle said:

Upside, leaving money in longer gives it time to grow more.

You can just assume that . It might and it might do the opposite .

I agree that values could easily go the opposite way. That is why I thought when taking income by selling investments, is it not better to make one sale of investments for income for the whole year, £12k in this case, when the values are high, even if you only want to draw out £1,000 from the SIPP each month if the tax is going to be a problem? 

Paul_Herring

, is it not better to make one sale of investments for income for the whole year, £12k in this case, when the values are high, even if you only want to draw out £1,000 from the SIPP each month if the tax is going to be a problem?

Well, that's probably a better idea.

That is, however, most definitely not what the OP was describing. They were wanting to leave the funds unsold for up to 11 months...

TBC15

The easy way is to draw out the maximum (keeping under your PTA) every month tax free . The best value if you don’t mind claiming the tax back is to draw the max out in April (keeping under your PTA).

It’s a waste if you draw a big lump out in March and still have to claim the tax back.

squirrelpie

Audaxer said:

 is it not better to make one sale of investments for income for the whole year, £12k in this case, when the values are high, even if you only want to draw out £1,000 from the SIPP each month if the tax is going to be a problem? 

But how do you know whether the value is going to be lower or higher later? If you can identify when values are 'high' then you have a great career as a pundit in your future.

AnotherJoe

Audaxer said:

Albermarle said:

Upside, leaving money in longer gives it time to grow more.

You can just assume that . It might and it might do the opposite .

I agree that values could easily go the opposite way. That is why I thought when taking income by selling investments, is it not better to make one sale of investments for income for the whole year, £12k in this case, when the values are high, even if you only want to draw out £1,000 from the SIPP each month if the tax is going to be a problem? 

Well, as said thats a strawman argument, how do you know when the values are high?