Small pot into DB

OldBeanz

A friend’s wife has been looking at her pension and ran the following scenario past me.

She is paid £14k pa and has been paying all her salary above her tax allowance into her LGPS AVC and then most years has been paying £8k (made up to £10k) into her SIPP.

Rather than taking the £8k from her savings, she was thinking of withdrawing a small pot sum of money from her HL SIPP three times over the last few years and using it to fund additional LGPS DB pension (£7.5k as she will only pay £1500 tax on £10k withdrawal). Is this feasible?

Marcon

Does she have lots of SIPPs with HL? A small pot withdrawal needs to use up the whole of the 'pot' in question.

cloud_dog

I believe HL are one of the providers who would create a small pot so as to facilitate.

garmeg

Marcon said:

Does she have lots of SIPPs with HL? A small pot withdrawal needs to use up the whole of the 'pot' in question.

Not necessarily 😉

cloud_dog said:

I believe HL are one of the providers who would create a small pot so as to facilitate.

What he / she said. 😀

Dox

garmeg said:

Marcon said:

A small pot withdrawal needs to use up the whole of the 'pot' in question.

Not necessarily 😉

Necessarily. If it doesn't, it isn't a small pot - so the individual concerned would need to have more than one SIPP with HL (or whoever) to do this.

xylophone

https://forums.moneysavingexpert.com/discussion/5998188/lta-small-pots-loophole

garmeg

Dox said:

garmeg said:

Marcon said:

A small pot withdrawal needs to use up the whole of the 'pot' in question.

Not necessarily 😉

Necessarily. If it doesn't, it isn't a small pot - so the individual concerned would need to have more than one SIPP with HL (or whoever) to do this.

Hargreaves will take £10k out of an existing pot (of any size) and pay it out as a small pot. You never see the small pot itself as it never really existed.

OldBeanz

Thanks, this is news to me - good news