Cash Buffer

Spivo46

I don't have a great amount of cash put aside in the bank or in my pension portfolios. Of course i could choose an investment that carries a % of cash in the fund. What is the view on taking out the 25% tax free and placing in an ISA? What is the difference / disadvantage?

Marcon

Spivo46 said:

I don't have a great amount of cash put aside in the bank or in my pension portfolios. Of course i could choose an investment that carries a % of cash in the fund. What is the view on taking out the 25% tax free and placing in an ISA? What is the difference / disadvantage?

What are the respective pension/ISA charges - and offerings in terms of return?

If they are similar, why would you want to withdraw funds from your pension and move them to an ISA if you could achieve much the same thing by picking appropriate funds within your pension plan? 

Marcon

Might be worth looking again at the thread you started a few months ago, asking much the same thing: https://forums.moneysavingexpert.com/discussion/6440065/25-tax-free#latest

Spivo46

Marcon said:

Spivo46 said:

I don't have a great amount of cash put aside in the bank or in my pension portfolios. Of course i could choose an investment that carries a % of cash in the fund. What is the view on taking out the 25% tax free and placing in an ISA? What is the difference / disadvantage?

What are the respective pension/ISA charges - and offerings in terms of return?

If they are similar, why would you want to withdraw funds from your pension and move them to an ISA if you could achieve much the same thing by picking appropriate funds within your pension plan? 

An ISA interest return will currently outperform cash left in the pension funds i have looked at (in cash and not stocks)

dunstonh

 What is the view on taking out the 25% tax free and placing in an ISA? 

What would that achieve?
It also suggests your pension is a relatively low value if it can all be put in an ISA.

An ISA interest return will currently outperform cash left in the pension funds i have looked at (in cash and not stocks)

Will it?
Some SIPPs allow retail savings accounts to be held in them and many retail savings accounts are higher than cash ISAs.     You also have access to unit linked funds that benchmark to SONIA which is a pretty good rate.

Taking money out of a pension needs justification.    It seems your justification is to make up for a shortfall in cash savings.  But without knowing if you have modelled your retirement plan, we cannot say if it is a good idea or not.

For example, you may find it more tax-efficient to leave it in the pension and do phased UFPLS for a long period.   Or a combination of methods across multiple tax wrappers.          What you propose may be best but we need the whole picture and not just one piece of the jigsaw.

Albermarle

Spivo46 said:

Marcon said:

Spivo46 said:

I don't have a great amount of cash put aside in the bank or in my pension portfolios. Of course i could choose an investment that carries a % of cash in the fund. What is the view on taking out the 25% tax free and placing in an ISA? What is the difference / disadvantage?

What are the respective pension/ISA charges - and offerings in terms of return?

If they are similar, why would you want to withdraw funds from your pension and move them to an ISA if you could achieve much the same thing by picking appropriate funds within your pension plan? 

An ISA interest return will currently outperform cash left in the pension funds i have looked at (in cash and not stocks)

Many pensions ( not all) have Short Term Money Market Funds ( STMMF) you can invest in, which are 'cash like' but usually pay a better rate than just leaving it in the normal cash account.