SIPP withdrawals

Bobinyorkshire

After some really helpful comments on the forum I’d made a decision to bridge the gap from finishing work until my NPA using a SIPP. The intention was to take £16760 for each of 3 years needed to maximise the PA and TFLS.  

However my contract is now been extended so I’ll only need to bridge 2.5 years, finishing in the Oct after I am 57. So am I better to take the TFLS in this last working year and then take £12750 in the 2 bridging years?

Also, is there a 6 month rule on starting to take the remaining pension after taking the TFLS? I only ask as I can delay taking the TFLS until nearer the end of the tax year if necessary

Hope this makes sense and thanks in advance

Linton

Given you are of an age when you can draw on your pension,  your SIPP TFLS is completely outside the tax system and hence when during the tax year you take it makes no difference whatsoever.

There are no restrictions on taking taxable pension beyond not being able to take it before you take the corresponding TFLS.

LHW99

There are no restrictions on taking taxable pension beyond not being able to take it before you take the corresponding TFLS.

Except that if you do get extra work unexpectedly in the next 2.5 years (sudden request for a new few months contract), you will be restricted to the MPAA for any further payments to pension if you have already taken any taxable cash (even if you don't have enough income to actually pay any tax)

Albermarle

So am I better to take the TFLS in this last working year 

If you do not actually need it why take it all out, what would you do with it ?

Fine if you have plans to spend it all quickly on a new car, yacht etc, but if it is just going to sit in a bank account then you might as well leave it where it is .

Bobinyorkshire

Thank you, that’s really helpful. I was planning on using the TFLS to help fund the rest of that half year when I’ll have no salary and then to use £12750 (from the SIPP each year) + savings to get through the following 2 years. I’ll then get my NHS pension at 60 (without reduction) which will cover my outgoings and will ironically increase more per annum than my salary ever did 😀