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SHORT FIXED TERM INCOME PLANS

Spivo46
Posts: 155 Forumite

I would like a short fixed term income plan for 2 to 3 years. I just want to de-risk what i have for that period while still creating some revenue. This works for me as it keeps me under my personal tax allowance. Having completed a quick internet search legal and general seem pretty good and also seem flexible. Looking to put £270k in and receive that lump sum back at the end of the term. works out around 6%. Any pointers please? Would an IFA get me better rates?
Also, i assume the lump sum returned at the end of the period is not taxed if it goes straight back into another pension product?
Also, i assume the lump sum returned at the end of the period is not taxed if it goes straight back into another pension product?
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Spivo46 said:I would like a short fixed term income plan for 2 to 3 years. I just want to de-risk what i have for that period while still creating some revenue. This works for me as it keeps me under my personal tax allowance. Having completed a quick internet search legal and general seem pretty good and also seem flexible. Looking to put £270k in and receive that lump sum back at the end of the term. works out around 6%. Any pointers please? Would an IFA get me better rates?
Also, i assume the lump sum returned at the end of the period is not taxed if it goes straight back into another pension product?
An IFA might well be able to get you better rates - and they might also be able to mop up any confusion in the process!Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1 -
Also, i assume the lump sum returned at the end of the period is not taxed if it goes straight back into another pension product?To remain tax free, it has to stay within the pension wrapper. It cannot leave the pension wrapper.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.1 -
Spivo46 said:Also, i assume the lump sum returned at the end of the period is not taxed if it goes straight back into another pension product?But I've only been a casual observer on those threads, so I could have that completely wrong.Spivo46 said:Any pointers please?
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QrizB said:Spivo46 said:Also, i assume the lump sum returned at the end of the period is not taxed if it goes straight back into another pension product?But I've only been a casual observer on those threads, so I could have that completely wrong.Spivo46 said:Any pointers please?
From memory, the average over-55 has a greater than 1% chance of dying in any given year, which isn't huge but is worth thinking about!0 -
Marcon said:Spivo46 said:I would like a short fixed term income plan for 2 to 3 years. I just want to de-risk what i have for that period while still creating some revenue. This works for me as it keeps me under my personal tax allowance. Having completed a quick internet search legal and general seem pretty good and also seem flexible. Looking to put £270k in and receive that lump sum back at the end of the term. works out around 6%. Any pointers please? Would an IFA get me better rates?
Also, i assume the lump sum returned at the end of the period is not taxed if it goes straight back into another pension product?
An IFA might well be able to get you better rates - and they might also be able to mop up any confusion in the process!0 -
dunstonh said:Also, i assume the lump sum returned at the end of the period is not taxed if it goes straight back into another pension product?To remain tax free, it has to stay within the pension wrapper. It cannot leave the pension wrapper.dunstonh said:Also, i assume the lump sum returned at the end of the period is not taxed if it goes straight back into another pension product?To remain tax free, it has to stay within the pension wrapper. It cannot leave the pension wrapper.0
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Having researched 'Fixed term annuities' (FTA) recently...... if you purchase an FTA with a crystallised pension pot then at the end of the term when you get the maturity lump sum back you can either...... buy another annuity..... take it all and pay tax on it...... or, open a SIPP with it and drawdown, paying tax at your marginal rate. You can use UNcrystallised funds to buy an annuity but when you get the lump sum back at the end of the term the WHOLE AMOUNT is taxable, effectively losing your right to take 25% of your pot tax free!1
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BoxerfanUK said:Having researched 'Fixed term annuities' (FTA) recently...... if you purchase an FTA with a crystallised pension pot then at the end of the term when you get the maturity lump sum back you can either...... buy another annuity..... take it all and pay tax on it...... or, open a SIPP with it and drawdown, paying tax at your marginal rate. You can use UNcrystallised funds to buy an annuity but when you get the lump sum back at the end of the term the WHOLE AMOUNT is taxable, effectively losing your right to take 25% of your pot tax free!0
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