100k how do I invest to avoid tax

Albermarle

I wondered if there were any suggestions on what might be the key savings interest / tax issues to bear in mind now that I no longer work. Is it as simple as now being able to generate up to the personal allowance amount 12,570 of savings interest each year before tax is payable and so no longer having to consider ISAs on any other basis than if they happen to pay higher interest than non ISA accounts? What other things should I consider?

If you have no earnings, you can earn up to £18750 in interest before paying tax .

Tax-free savings: check if you're eligible - Money Saving Expert

A popular way for someone in your position, is to take UFPLS payments from your pension pot, in the years between stopping work and getting the state pension. This means a payment that is 25% tax free and 75% taxable. You make sure the taxable part is exactly £12570 so you just use up your personal allowance.

You could still get £6000 in interest without paying tax .

The other issue to consider is not tax, but how your pension is invested and how much cash you should have/need as part of your financial retirement strategy. Also presumably your wife has pension provision?

aphty

Thanks – very helpful! I guess what I’m really doing here is exploring a modelling process around the following ‘hypothetical’ conditions for myself and my wife;

Total savings for both of us (mix of ISAs and non ISAs) = 200k

Wife (aged 58) will continue working (net income 30k pa) 9 more years until aged 67 she will receive approx. 10k pa state pension and 10k pa defined benefits pension

Self (aged 61) will receive approx. 10k pa state pension in 6 years time. Approx current personal pension pot value (3 separate pots) = 650k

Ideal objective if not working for next 6 years for self is to contribute net 30k pa in the most tax efficient way possible. My initial simplistic thoughts were to use the savings first before accessing the pension pots but I am not sure if that is the best approach. I very much agree that I need financial advice on how to best invest and plan access the pension pots. I would also want to factor in maximising a legacy within the model too if possible.

Again, any thoughts gratefully received!

Dazed_and_C0nfused

Ideal objective if not working for next 6 years for self is to contribute net 30k pa in the most tax efficient way possible.

Do you mean contribute to the family finances or contribute to a pension?

If the latter you will be limited to £3,600 (gross) in each future tax year where you have no earnings (or no more than £3,600 in earnings).

If the former making use of your Personal Allowance is likely to be a sensible move.

And Marriage Allowance may well be worthwhile exploring.

aphty

Was thinking contribute to the family finances and hadn't considered contributing more to the pension as something I should aim to do? But that's because I'm not clear on the pros and cons of each route.
Will definitely explore Marriage Allowance - yet another angle I was not aware could be usefully considered. 
Thanks

maxmycardagain

Gold....
buy it
sell for cash when you need money

eskbanker

maxmycardagain said:

Gold....
buy it
sell for cash when you need money

Well that definitely endorses my earlier comment that "it's generally better to seek to maximise net return than to try to minimise tax as such"!