Should I spend savings or pension first?

BookerDeWitt

I am 60, single and will be retiring soon. £300K in a personal pension and about the same in savings/investments.

At 66 I will get a pension from my current employer of about £9.5K and state pension of about £8.5K.

No debt but I am the BoMD for 1 adult child 

I had planned to live off of my savings for the next 6 years but are there any advantages to drawing on my personal pension now and keeping hold of my savings - or doesn't it matter?
Thanks

Sea_Shell

If you pull from your pension, you'll be able to utilise your personal allowance for 6 years without paying tax.

Are your investments wrapped in ISAs or subject to possible CGT.

Everything else being equal, use the funds with best performance?

Or cash earning the least interest!

That's our plan anyway

squash18

Could you put your savings into your personal pension and get tax relief on them ? 

triplea35

BoMD?    .

AlanP_2

Have a look at your State Pension forecast asyou may be able to increase the amount you get by buying additional years.

Croeso69

triplea35 said:

BoMD?    .

Bank of Mum and Dad

Albermarle

It is often mentioned on here that people take £16666 from their DC pension/SIPP each year . 75%/£12500 taxable ( but not above  the personal allowance ) and 25% tax free. This is what is called a UFPLS payment . 
Then top up from savings .
This fully utilises the personal tax allowance , whilst leaving the rest of the pension to grow ( hopefully).
The only drawback is that for it to work you can not take the full 25% from the pension ( approx £75K in your case ) up front like some people like to do to .
Basically you are taking the tax free money in stages ( once a year ) along with a limited amount of taxable money. For practical reasons it is easier to take just one payment ( £16666) per year, rather than taking smaller regular payments .

Linton

Assuming you have no other income, to minimise total tax you should drawdown your full tax allowance of otherwise taxable money every year whilst you can get it tax free.  You can use that money for spending or put it in an S&S ISA, perhaps using the same investments as in the pension.

BookerDeWitt

Thanks to all for replying. Seems a bit more complicated than I had thought!

Albermarle

BookerDeWitt said:

Thanks to all for replying. Seems a bit more complicated than I had thought!

Well you did ask the best way to do it !
 All you have to do is contact your pension provider once each tax year and request a UFPLS payment for £16666 ( based on current personal allowance)
Often they will take some tax off, but you just claim it back with a simple form .
In this way you do not waste your personal tax allowance , which you would if you just use savings for six years and would end up paying more tax later.

xylophone

Even when you have no relevant earnings, you can still contribute a net £2880 per annum to a personal pension and receive tax relief of £720.

You could therefore go  the UFPLS route as above and contribute from your savings to  a pension - even if you chose not to invest within the pension (keep your fund in cash), you are making a gain over what your savings are earning in interest.