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Flexi Access Drawdown - tax implications
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Albermarle said:older_and_no_wiser said:L9XSS said:Just to throw this in the mix.......You can utilise the small pots rule up to 3 times......I transferred £29,700 from my Main SIPP & split it to three other providers (AJ Bell, Fidelity, HL)...I then utilised 2 of them to pay off my mortgage. I took 25% tax free from the two of them and paid tax on the remaining 75%....Depends how much cash you need I need the end I suppose to service your debt/purchase.
Does that "small pots rule" only apply to SIPPs with different providers? I will have all my pension in one platform (Interactive Investor) and may want to move lump sums several times across a few years to a flexi-access drawdown account (still with II). Is that OK?
It was not really the idea that people with large pensions, split off small pots, to take advantage of the rule.
Probably the fact there is significant admin involved for the provider, with little reward, means only HL will do it on the retail side AFAIK ( probably some financial advisor focused providers will also do it) Some providers may also be a bit squeamish about doing it is as it is against the spirit of the rule.
Otherwise you have to transfer or add < £10K to a new provider, to take advantage of it as @Pat38493 has done ( and I did )
Also not every provider will facilitate even one small pot rule withdrawal. I think for example Vanguard will not.0 -
I've not had any critique of my initial queries and examples (apart from my poor adding up
) so it seems like I'm thinking along the right lines.
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older_and_no_wiser said:I've not had any critique of my initial queries and examples (apart from my poor adding up
) so it seems like I'm thinking along the right lines.
'Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it' - Albert Einstein.0 -
Doctor_Who said:It all looks OK to me. My question would be do you need the TFC upfront since it's often better to keep it in the pension until it's actually needed and what other pension arrangements do you have (DB/SP)? It's obviously different retiring at ~58 with a £400K SIPP if you have a DB pension kicking in at ~65 vs needing the SIPP to last another ~30 years.Well I am single with no dependants and no requirement for a legacy. I don't need much per year in retirement (< £18,000 pa) to have a good lifestyle and will also have full state pension at 67 and an inheritance at some point. At 58 (possible retirement age) I will have around £500,000 in the SIPP, £100,000 in ISAs and £40,000 in cash.My ISAs and SIPP are mainly invested in HSBC GS Dynamic and global equity trackers. I could possibly dial down the risk at some point and go more into bonds to protect what I have but I always keep at least 2 years living expenses in cash so not too worried about market crashes as they always recover.I'm not even too bothered about paying for any care needs when I get old - as my plan would be to just use equity release or sell my property to pay for it should I not have enough money left at that point.
I know I could go to the ISA for any large withdrawals but I will probably end up leaving so much in the pension when I'm very old and have little need to spend much money. I would like to use the pension etc as much as possible (without giving too much to HMRC!) for some luxuries like new cars and nice holidays while I'm young enough to enjoy them.
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