Pension drawdown advice. Time to access

eric4395

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  🙂

Marcon

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  ?)

Yes provided you are within whatever the annual limit for ISA contributions is.

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  🙂

Why? If the issue is with your provider, and that's what you want to do, then maybe consider transferring to a provider which can cater for tax free cash post-75.

Pipthecat

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.  

eric4395

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  ?)

Yes provided you are within whatever the annual limit for ISA contributions is.

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  🙂

Why? If the issue is with your provider, and that's what you want to do, then maybe consider transferring to a provider which can cater for tax free cash post-75.

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.
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?

eric4395

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.  

No I have £500,000 in my pension pot

dunstonh

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.

eric4395

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.

I thought  you were entitled to take 25% of your pension pot tax free? So how does this work now. If I say took £20,000  in a lump sum out the now ?

Phossy

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.

AlanP_2

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.

Marcon

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  ?)

Yes provided you are within whatever the annual limit for ISA contributions is.

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  🙂

Why? If the issue is with your provider, and that's what you want to do, then maybe consider transferring to a provider which can cater for tax free cash post-75.

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 'advice' is well out of date, as dunstonh has pointed out above.

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

eric4395

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  ?)

Yes provided you are within whatever the annual limit for ISA contributions is.

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  🙂

Why? If the issue is with your provider, and that's what you want to do, then maybe consider transferring to a provider which can cater for tax free cash post-75.

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 'advice' is well out of date, as dunstonh has pointed out above.

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

Could you point it out what I am looking from here then ?
https://www.gov.uk/tax-on-pension/tax-free