erode the Drawdown or the Savings - which is the best option ?

tommo45

can anyone offer any advice here.

lets say I have £100k in a drawdown pension (25% tax-free already removed) & the same amount in savings across a mixture of ISA's / savings accounts (lets say the savings interest is below my taxable amount), I then receive an annuity of £15k, the annuity is not enough to live on so each year I need to supplement that with a further £10k - the question I have is this, for the next 10 years which of the 2 pots of money should I remove the extra 10k from, the aim being to pay the least tax but gain the most interest/growth in my overall funds.

**this is hypothetical, so we can ignore my age & what happens after the 10 years.

thanks in advance, Mark.

dunstonh

which of the 2 pots of money should I remove the extra 10k from, the aim being to pay the least tax but gain the most interest/growth in my overall funds.

With that criteria, you would draw it from the savings.  No tax on drawing from savings and cash interest rates will be lower in most periods than a typical invested portfolio 

Then when the savings gets low you draw from the pension to top up the savings and repeat (just one of the many different ways you can do things).

tommo45

many thanks, that makes sense to me.

Mark