Best LTA strategy for me now we know it’s frozen for a while

Madeinireland101

I am nearly 60 and have three pensions.
One is a DB Pension that I am now drawing and has used up about 70% of my lifetime allowance.
The other two are separate DC pensions in the form of SIPP’s - one is about £225k and the other is about £85k.
I have already used the small pots rule to remove £30k from the smaller SIPP.
I had hoped that the anticipated inflation rise this year would have enabled me to crystallise the two SIPPs such that I was just under the LTA. They are both currently all in cash and after crystallisation I was aiming to invest. Now that’s been scrapped in the budget I will currently exceed the LTA if I go ahead and crystallise them - probably to the tune of £5-10k.
Should I....
1. Go ahead and crystallise and take the hit now?
2. Crystallise the bigger SIPP but not the smaller one and maybe gamble on LTA being scrapped before I’m 75? If it isn’t scrapped then I’d have a bigger hit I presume when I’m 75. I’d pull out any growth from the bigger SIPP so it would only be the smaller one that would impact the LTA I presume.
3. Take another approach I haven’t thought of as yet but you would propose?
l don’t currently need the funds as yet and thought I’d pass them as inheritance when I die if I don’t have a need to draw on them before then.
Thanks in anticipation....

Albermarle

It does seem very logical that you had a plan, and now you are thinking of changing it just because a planned rise in the LTA of 0.5% will not happen. This means you will probably pay around £2k extra tax . Considering your financial position and when you invest the SIPPS they will regularly go up and down by many times that amount in a day , it is a minor issue.
You have probably lost a lot more by keeping them in cash then any tax you are likely to have to pay . As they say ' Don't let the tax tail wag the investment dog' 

Madeinireland101

Thanks - I’ve only had them in cash a short while and I can invest with them whether they are crystallised or not I suppose. So are you suggesting I should go ahead and crystallise them or just the bigger SIPP? If I leave them uncystallised I presume the LTA will just get much worse as the investments grow?

Madeinireland101

Sorry I should have said it’s a sanity check on my plan at the same time.

Notepad_Phil

Two further options:

1) You could crystallise up to the LTA from both of the SIPPs so you'll only have a few thousand left uncrystallised in one and then see what happens.

2) Crystallise one now and then hope for a market downturn so you could crystallise the second at a lower price.

Given the frequency of downturns I'd personally would crystallise the large SIPP and then wait for the markets to go down - if they never significantly go down between now and 75 then I'd thank my lucky stars that markets had been so good and would willingly pay the extra tax.

TVAS

God now we are hoping for a market downturn so we pay less tax I've heard it all now. 

Madeinireland101

Notepad_Phil said:

Two further options:

1) You could crystallise up to the LTA from both of the SIPPs so you'll only have a few thousand left uncrystallised in one and then see what happens.

2) Crystallise one now and then hope for a market downturn so you could crystallise the second at a lower price.

Given the frequency of downturns I'd personally would crystallise the large SIPP and then wait for the markets to go down - if they never significantly go down between now and 75 then I'd thank my lucky stars that markets had been so good and would willingly pay the extra tax.

Yeah I like option 1 - I don’t like the idea of hoping for a downturn but at least it postpones the LTA charge till later.

Albermarle

I do not think Notepad Phil literally meant 'hoping ' for a market downturn . I think he meant in case of a market downturn ( which happen on a a regular basis ) then that could be a good time to crystallise .