Creating a small pension pot

[Deleted User]

Has anyone done this and is it legit / permissible?

To create a small pension pot (under £10,000) with the intent on accessing it under the small pension pot pension rules within the short term (i.e. within a year or two).

Kind regards

Dazed_and_C0nfused

Lots of people.  There's a massive thread about turning £2,880 into £3,600 each year.

Not specifically about the "small pots" rule as such but the principle is similar although I suspect many aren't bothered about invoking MPAA.

xylophone

turning £2,880 into £3,600 

Abracadabra and shake the magic money tree?

Dazed_and_C0nfused

xylophone said:

turning £2,880 into £3,600 

Abracadabra and shake the magic money tree?

It does seem like that!  For each individual it must pale into insignificance compared to the higher rate tax relief some can benefit from but it must all add up to a sizeable amount!

OldBeanz

HL will create a small pot for you.

dunstonh

OldBeanz said:

HL will create a small pot for you.

Is that through investing in Woodford?

[Deleted User]

Thanks for updates.  I read about the small pots in an old thread I could not find.

I’ll investigate HL.  I was also thinking if Vanguard as the fees are quite low.  In fact I’m thinking of two small pots to bridge those extra years.

LV_426

OldBeanz said:

HL will create a small pot for you.

Pensionbee apparently too, according to some

OldBeanz

[Deleted User] said:

Thanks for updates.  I read about the small pots in an old thread I could not find.

I’ll investigate HL.  I was also thinking if Vanguard as the fees are quite low.  In fact I’m thinking of two small pots to bridge those extra years.

Despite the comments on here, if you phone HL they will sort you out. As you get older you realise, you pay for service. Don't expect that from Vanguard. The wife's 2nd pot this FY although not yet drawn is already allocated against her tax allowance so no reclaiming of tax.

Marcon

Start a personal pension with any provider and ensure you withdraw the whole of it in one go before it hits the £10,000 mark - and also ensure you stipulate you are taking the cash under the small pots rule. That way you won't trigger the Money Purchase Annual Allowance and you use 0% of your Lifetime Allowance. You can do this up to 3 times with personal pensions (no limit on the number of times you can do it with true occupational schemes, but those are self-limiting for obvious reasons. Confusingly, things like group personal pensions are NOT occupational schemes).