Cash in SSIP, de-risking and lifetime allowance

Workerbee999

OH and myself are both 51, plan to retire at 55. DBs and SP will meet all our income needs from 67/8 and cash lump sums from the DBs will fill in the gaps between 60-67 as the DBs start between 60-65.

I also have DC and SSIP of £450k which will be the majority of our income 55-60. The 25% tax free will be used towards retirement home purchase, then we will draw up to the 40% tax free level. OH also has a SSIP with £90k to draw 25% tax free and personal allowance for 55-60. We plan to draw down the majority in the 5 years 55-60 when we are most active- travel etc - leaving around £100k contingency (emergency pot, or to offset inflation risk on DBs which mostly have a 5% CPI cap, or towards care fees).

 I am at the lifetime allowance now ( or more accurately will be, taking into account 4 more years of the DB I am in but no more other investment growth) so am likely to be subject to the additional tax, especially now the LA is frozen. I will make use of the 3x small pots rule. OH has enough space to increase his SSIP level taking into account 4 more years of his DB too.

 I posted on here a while ago about how to derisk as the equity was around 70%/30% bonds. The general consensus was to move the majority to cash as we want to draw it down over a short time frame. I didn’t do it straight away and so have captured some of the recent gains, but have made some progress now - £100k cash in DC and £50k SSIP in HSBC Global Conservative, which I think is a larger proportion of bonds (not much bond options in the DC). Then £100k in a multi asset @ risk level 4, and £200k in global equity trackers. OHs SSIP is in higher risk, mainly HSBC Global and Vanguard Lifestyle funds. There is still more derisking to do.

For as long as 40% tax relief remains over the next 4 years we will continue to increase OHs pot in global trackers. Any other funds available then go into S&S ISAs, also in Global trackers. BUT, I am then transferring twice as much to cash in my DC. So effectively all new funds are being added as cash, as well as derisking more of the existing balance,  just it sits in the SSIP instead of outside.

I would like some opinions on this approach as I have read other posts about it not making sense to have cash in SSIPs because they don’t earn anything/ erode with inflation. But that’s the case with all cash and yet there are consistent recommendations to hold some cash buffer. If I need some cash somewhere it makes sense to me to gain the tax relief benefit as HRT payer by continuing to add to the SSIP even if no interest is earned ( which is really poor at the moment), grow ISA balances where there is no LA issues, and keep the cash in the DC to avoid Lifetime Allowance tax as much as possible. Am I missing anything? ( We have premium bonds emergency fund and don’t need access to the DC before 55, one son who should safely inherit house as DBs/SPs would cover majority of care fees - so don’t need to keep the DC as inheritance, DBs evenly split so ok for surviving person ).

Would welcome any thoughts please.