Dual Drawdown Fund Dilemma

GSP

I am three years into drawdown and have a fund balance of c£750k. My wife will be able to start her drawdown of c£175k in 2022, so there are 5 years between us.
I have been running scenario’s, but can’t decide on the best strategy for us. I can either:
Run my pot down, where the decline is halted somewhat when SP kicks in at 67, and just leave hers to grow and use in case we need.
Drawdown both fully utilising the personal tax allowance (£25k). Currently I am using part of her tax allowance on mine which is £13,750.
Or leave mine and run hers down leaving mine to grow more with the bigger figure, though I have just thought of that without running any scenarios. Think that will probably just run out of money too soon.
Just wondered how others would ‘play this’ using two funds to an advantage perhaps of sorts.
Thanks

cloud_dog

I wouldn't waste being able to use her personal allowance, and would work around that.  You could always continue paying £3600 (gross) in to her SIPP.

garmeg

With a fund that high you probably dont have much LTA left so beware of any LTA charge at age 75 should you not draw down enough from your pot prior to age 75.

tacpot12

As per cloud_dog's advice, the tax relief is too valuable, so draw at least your personal allowance from both pensions and do the pension recycling thing. 

I don't think there is any particular way to play the situation of having two portfolios. Give the large imbalance between the funds, I'm inclined to think you should be spending your fund first until both funds are roughly equal; so draw down on yours, while leaving hers to grow. I think this would be in her long term interest. 

GSP

tacpot12 said:

As per cloud_dog's advice, the tax relief is too valuable, so draw at least your personal allowance from both pensions and do the pension recycling thing. 

I don't think there is any particular way to play the situation of having two portfolios. Give the large imbalance between the funds, I'm inclined to think you should be spending your fund first until both funds are roughly equal; so draw down on yours, while leaving hers to grow. I think this would be in her long term interest. 

Thanks. My fund would be hers in future though if I go first.

GSP

Sorry forgot to add. Don’t like discussing this but sure it will get ‘thrown into the mix’ at some point, but in addition we anticipate 3 inheritances totalling about £500k in twenty years or less. 

Dox

GSP said:

Sorry forgot to add. Don’t like discussing this but sure it will get ‘thrown into the mix’ at some point, but in addition we anticipate 3 inheritances totalling about £500k in twenty years or less. 

Maybe buying some proper independent financial advice rather than relying on strangers who comment on just a paragraph or two of information about you might be a good use of your cash? Sounds as if you have some longer-term planning to take into account.

Linton

I would agree that you should make maximum use of your tax allowances, putting the money into his & hers S&S ISAs if need be.  As your wife is significantly younger than you it could be good for her "ownership" of the family finance management to use your drawdown to maximise the amount going into her S&S ISAs.

On the other hand, given that I guess you will end up with more money than you can sensibly use in your lifetime, there could be inheritance tax advantages in leaving money in your pension and using savings more for current expenses.

I think the main issues are tax planning, in terms of total amount of money available during retirement it doesnt make much difference what you do.

GSP

Dox said:

GSP said:

Sorry forgot to add. Don’t like discussing this but sure it will get ‘thrown into the mix’ at some point, but in addition we anticipate 3 inheritances totalling about £500k in twenty years or less. 

Maybe buying some proper independent financial advice rather than relying on strangers who comment on just a paragraph or two of information about you might be a good use of your cash? Sounds as if you have some longer-term planning to take into account.

Thanks but I will be ‘having a conversation’ with my IFA as well. Since I found this forum however it’s also been very useful reading comments from both end of the spectrum sometimes. It doesn’t harm reading other opinions, and if some of these tally up with what my IFA suggests as well, I’m very comfortable with that. 

Marcon

GSP said:

Dox said:

GSP said:

Sorry forgot to add. Don’t like discussing this but sure it will get ‘thrown into the mix’ at some point, but in addition we anticipate 3 inheritances totalling about £500k in twenty years or less. 

Maybe buying some proper independent financial advice rather than relying on strangers who comment on just a paragraph or two of information about you might be a good use of your cash? Sounds as if you have some longer-term planning to take into account.

It doesn’t harm reading other opinions, and if some of these tally up with what my IFA suggests as well, I’m very comfortable with that. 

...and whose 'advice' do you follow when they don't tally? Does your IFA have to justify why the advice given doesn't tie up with comments from random internet users with next to no knowledge of you, your attitude to risk, your health, your level of debt...

GSP

Marcon said:

GSP said:

Dox said:

GSP said:

Sorry forgot to add. Don’t like discussing this but sure it will get ‘thrown into the mix’ at some point, but in addition we anticipate 3 inheritances totalling about £500k in twenty years or less. 

Maybe buying some proper independent financial advice rather than relying on strangers who comment on just a paragraph or two of information about you might be a good use of your cash? Sounds as if you have some longer-term planning to take into account.

It doesn’t harm reading other opinions, and if some of these tally up with what my IFA suggests as well, I’m very comfortable with that. 

...and whose 'advice' do you follow when they don't tally? Does your IFA have to justify why the advice given doesn't tie up with comments from random internet users with next to no knowledge of you, your attitude to risk, your health, your level of debt...

Yes quite. There’s the bit in sifting through advice and suggestions to form an opinion. As well as good advice, I have seen some bad ones as well.