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Pension drawdown advice. Time to access

eric4395
Posts: 120 Forumite


I am currently 69 and only retired last year with a government pension of approx £12,000 a year. My wife has a pension of approx £11,000 a year
My works dc pension which i havent touched has approx £500,000 in it. It will be used as income drawdown. As i know i would be able to have access to 25 % tax free.
As i have 6 years till i am 75 would it be sensible to take it out in £20,000 lump sums every year where i intend to put it in an isa either a fixed rate or prob an easy access isa.( Can i do this ?) If i dont then i will lose this tax free sum when i turn 75. I do have other savings mostly in current isas which i can easily live on for the time being. Is this a sensible way to go. Ps i do spend my money on hols etc and also help close family members 🙂
My works dc pension which i havent touched has approx £500,000 in it. It will be used as income drawdown. As i know i would be able to have access to 25 % tax free.
As i have 6 years till i am 75 would it be sensible to take it out in £20,000 lump sums every year where i intend to put it in an isa either a fixed rate or prob an easy access isa.( Can i do this ?) If i dont then i will lose this tax free sum when i turn 75. I do have other savings mostly in current isas which i can easily live on for the time being. Is this a sensible way to go. Ps i do spend my money on hols etc and also help close family members 🙂
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eric4395 said:I am currently 69 and only retired last year with a government pension of approx £12,000 a year. My wife has a pension of approx £11,000 a year
My works dc pension which i havent touched has approx £500,000 in it. It will be used as income drawdown. As i know i would be able to have access to 25 % tax free.
As i have 6 years till i am 75 would it be sensible to take it out in £20,000 lump sums every year where i intend to put it in an isa either a fixed rate or prob an easy access isa.( Can i do this ?)eric4395 said:If i dont then i will lose this tax free sum when i turn 75. I do have other savings mostly in current isas which i can easily live on for the time being. Is this a sensible way to go. Ps i do spend my money on hols etc and also help close family members 🙂Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!0 -
I'm not sure if your are including state pensions but, if I'm reading you correctly have combined pensions of between £23k to £40k+ with savings on top. Something to consider if you have plans to make any large DC withdrawals is how best to use the tax free element to keep yourself from paying a higher rate of tax.0
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Marcon said:eric4395 said:I am currently 69 and only retired last year with a government pension of approx £12,000 a year. My wife has a pension of approx £11,000 a year
My works dc pension which i havent touched has approx £500,000 in it. It will be used as income drawdown. As i know i would be able to have access to 25 % tax free.
As i have 6 years till i am 75 would it be sensible to take it out in £20,000 lump sums every year where i intend to put it in an isa either a fixed rate or prob an easy access isa.( Can i do this ?)eric4395 said:If i dont then i will lose this tax free sum when i turn 75. I do have other savings mostly in current isas which i can easily live on for the time being. Is this a sensible way to go. Ps i do spend my money on hols etc and also help close family members 🙂
If I didn't touch any off it till I was 75 then surely anything I took out which would put me above the £12,570 ( (approx my state pension) allowance would be taxed. If i take out lump sums every year and place in an ISA then surely it's protecting some of my pension pot from tax . I am not sure what this cash post 75 is?0 -
Pipthecat said:I'm not sure if your are including state pensions but, if I'm reading you correctly have combined pensions of between £23k to £40k+ with savings on top. Something to consider if you have plans to make any large DC withdrawals is how best to use the tax free element to keep yourself from paying a higher rate of tax.0
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My financial adviser who retired a couple of years ago who set this up said remember and at least use the 25% tax free sum b4 you are 75. Either use it or lose it.That is obsolete now.
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.0 -
dunstonh said:My financial adviser who retired a couple of years ago who set this up said remember and at least use the 25% tax free sum b4 you are 75. Either use it or lose it.That is obsolete now.0
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You are entitled to take 25% of your pot tax free. The obsolete comment I believe refers to 'before the age of 75'.
See Tax when you get a pension: What's tax-free - GOV.UK (www.gov.uk). The age of 75 becomes important only if you have less than a year to live, when they may allow you to withdraw everyting tax free due to a serious illness.1 -
The other aspect of age 75 is that if you die before 75 the inheritor beneficiaries can access it all tax free.
Die after 75 and they will still get the pension pot but will be taxed on withdrawals at their relevant income tax rate.
Few years away for us but my thinking is to take the 25% TFLS just before 75 to make best use of that facility.
This assumes rules don't change before then, and it doesn't introduce an inheritance tax issue.
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eric4395 said:Marcon said:eric4395 said:I am currently 69 and only retired last year with a government pension of approx £12,000 a year. My wife has a pension of approx £11,000 a year
My works dc pension which i havent touched has approx £500,000 in it. It will be used as income drawdown. As i know i would be able to have access to 25 % tax free.
As i have 6 years till i am 75 would it be sensible to take it out in £20,000 lump sums every year where i intend to put it in an isa either a fixed rate or prob an easy access isa.( Can i do this ?)eric4395 said:If i dont then i will lose this tax free sum when i turn 75. I do have other savings mostly in current isas which i can easily live on for the time being. Is this a sensible way to go. Ps i do spend my money on hols etc and also help close family members 🙂
Maybe a free appointment with PensionWise would help: https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise/book-a-free-pension-wise-appointmentGoogling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1 -
Marcon said:eric4395 said:Marcon said:eric4395 said:I am currently 69 and only retired last year with a government pension of approx £12,000 a year. My wife has a pension of approx £11,000 a year
My works dc pension which i havent touched has approx £500,000 in it. It will be used as income drawdown. As i know i would be able to have access to 25 % tax free.
As i have 6 years till i am 75 would it be sensible to take it out in £20,000 lump sums every year where i intend to put it in an isa either a fixed rate or prob an easy access isa.( Can i do this ?)eric4395 said:If i dont then i will lose this tax free sum when i turn 75. I do have other savings mostly in current isas which i can easily live on for the time being. Is this a sensible way to go. Ps i do spend my money on hols etc and also help close family members 🙂
Maybe a free appointment with PensionWise would help: https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise/book-a-free-pension-wise-appointment
https://www.gov.uk/tax-on-pension/tax-free
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