Pension drawdown advice. Time to access

Marcon

eric4395 said:

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That 'advice' is well out of date, as dunstonh has pointed out above.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

No, because the legislation has changed and the upper limit of 75 generally no longer applies (unless in 'serious ill health') so there won't be any reference to it. Surely it's the absence of any such reference which should serve as reassurance?

QrizB

Marcon said:

eric4395 said:

Marcon said:

eric4395 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That 'advice' is well out of date, as dunstonh has pointed out above.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

No, because the legislation has changed and the upper limit of 75 generally no longer applies (unless in 'serious ill health') so there won't be any reference to it. Surely it's the absence of any such reference which should serve as reassurance?

I dn't know exactly when the legislation changed (maybe one of the regulars does?) but it was already a myth in 2017 per this ABRDN article (see Myth 4):

https://techzone.abrdn.com/anon/public/pensions/pension-tax-free-cash-myths

Peterrr

OP - based on the information you provide, you and your wife are in a comfortable financial position for a couple in their late 60s: combined state pensions of £23k and pension savings of £500k. I'd suggest you seek paid-for one-off advice from a financial planner who will likely advise that you should start spending and enjoying some of that hard-earned cash 

eric4395

Peterrr said:

OP - based on the information you provide, you and your wife are in a comfortable financial position for a couple in their late 60s: combined state pensions of £23k and pension savings of £500k. I'd suggest you seek paid-for one-off advice from a financial planner who will likely advise that you should start spending and enjoying some of that hard-earned cash 

Honestly we do, 4/5 holidays a year,including cruises on silverseas & regent sevens seas ( Expensive yes😲), passed money on to son & daughter have started   a lisa for our grandsons contributing the max of 4000 each. Spent money on furnishings for  our house etc.We have both worked all our days since we were 16 We aren't tight but have found ourself with a fair sum of money at our disposal and trying to work out the best way to plan ahead without paying excessive tax on it so as we can leave it to our family. We had a financial adviser up until 2 years ago  (now retired) who set up my pension and suggested income drawdown in our situation. Last thing he said was remember and take the 25% out b4 you are 75. Now it seems that's up in the air as well. Do I now need to get another financial adviser to guide me further🤔

xylophone

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?

 You currently receive a state pension of approximately  £230 a week which is within the Personal Allowance of £12,570.

However, assuming that the PA remains the same in the tax year 24/25, your pension will be around £249 a week and so in excess of the Personal Allowance.

It appears that you have a standard defined contribution pension valued at  £500,000 which you have not yet accessed.

It would be possible to take a tax free Pension Commencement Lump Sum of £125,000.  If more was withdrawn from the pension, it would be treated as taxable income in the tax year it was withdrawn.

However, you do not have to take the full PCLS in this way.  There are other ways of accessing the pension.

You could book an appointment with Pension Wise for guidance and to discuss these options.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise/explore-your-pension-options/the-six-pension-options

You would need to find out whether your current pension provider would facilitate flexible access as above - if not you would transfer to one that did.

if you felt that you needed advice rather than guidance then you would need to find an IFA and pay for it.

You could try https://adviserbook.co.uk/

Tick "confirmed independent" and other options as required when the menu comes up.