Non Earner should I start drawing down pension at 55 into ISA's

Albermarle

As far as I know, with a with profits fund they can apply an MVR , except on the date they have for your retirement date. This is probably 65 and the fact you can legally start taking the pension at 55 may not be relevant.
I think that is the case anyway. If it is you would probably be best to wait until the MVR is cancelled.

alwayslearning77

Just thought I would post an update regarding transferring the Pru with Profits pension to Interactive Investor in case anyone thinking of doing similar.  I waited until there was no MVR to pay and then asked ii to transfer.  Been very impressed with ii customer service, they reply to every email with 24 hours usually with a meaningful update rather than the standard "we have your enquiry and will get back to you". They send updates via email with which stage the transfer was at and what they had done and what the next stage was. Pru on the hand have been worse than I expected. No communication whatsoever to tell me anything unless I contact them, and appear to close my login to my policy over a week before transfer was complete so I couldn't message them or chat.  If you phone, they won't put you through to the "Out Pensions" , you have to arrange a call back and even then, couldn't tell me what documentation they thought they didn't have (they did!). On the phone they said, can't ii use Origo for the transfer.  I explained that I rather thought that was discussion that the Pru should be having with II.  Having said that the transfer started around mid April and completed mid June so not too bad. 

atush

Sea_Shell said:

This is just what I'm planning on doing in 5 years time!

13 years to get it all out tax free and moved to ISA.

Once state pension kicks in, then drawdown would need to be reduced to "mop up" any balance, within the PA at the time.


I might even spend some of it!!! 😉😲

Or not lol.

alwayslearning77

Further to my previous question last year, now I'm 56 and still a non-earner and unlikely to be in the future, I will shortly start crystallising some of my DC pension so I can move it into ISA's to protect it from tax from 65 onwards and use my personal allowance between now and 65. I can't empty the whole pot tax free into ISA's before 65.  I feel I'm going round in circles second guessing myself with spreadsheets on best way to do this and tax implications etc.

I have 9 years to withdraw as much as I can and move it to ISA's (still invested in same fund as the pension and not spend it) before I would start paying tax.  Originally I was concentrating on trying to fill 2023/24 2024/25 ISAs for both my hubby and I (80k) so was concentrating on initially withdrawing around 80k in March 2024 (65k TFLS and 12570) then drawing 12570 for 8 years, but this would mean crystallising whole £260k pot.  My new plan is with withdraw 16760 for 8 years and then in year 9 (or may be earlier when we retire) crystallise the pot further/completely and take the TFLS to move it to ISAs.  My hubby thinks its a good idea to try and fill the ISA allowances now as we have them e.g crystallise the whole pot.  Later on other money from his pension may need a home in ISAs.  I'm not keen on leaving money crystallised this early on as it means no opportunity to grow further TFLS in future but of course if it was outside in the ISA it would be growing tax free anyway although subject to IHT.  We think retirement will be in 2-3 years time so we may well need to crystallise the remainder of the pot then to access the TFLS. 

So my question is, should I let the availability of the ISA's drive the decision of crystallising the whole pot? Options are endless.

1. Crystallise whole £260k and take whole TFLS so I can make use of ISA Allowance of £80k this tax year and next, then drawdown 12570 until age 65.

2. Take 16760k each year and postpone crystallising rest of pot until later on, but take TFLS before age 65 and put in   ISA's (may well need to crystallise rest of pot in 2-3 years to access rest of TLFS)

3.  Do something in between e.g crystallise 109500k and take TFLS £27K plus £12570 this year (means we could use 52k of ISA allowance for 23/24 24/25 between 2 of us, then drawdown the 12570 until age 65 and again crytallise rest of pot either at retirement 2-3 years or before 65.

Apologies if I'm rambling!!  Would appreciate any clear thinking on the above.  Thanks