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DC Pension Drawdown 25% Tax Free Options
Options
Bobbydue
Posts: 46 Forumite
Hi all,
About to put my pension into drawdown and have the option of taking 25% lump sum or taking all future drawdowns with 25% of it Tax free.
Taking a large lump sum brings its own problems, I'already paid of my mortgage and don't have any real debts, if I took the lump sum I would probably stick it in a fixed rate savings account paying 5% if I'm lucky, then having the Tax implications unless i fed it into ISA's which would take a few years.
Leaving the money invested in the Drawdown account allows me to take 25% of each drawdown invested which sounds attractive.
Just to add, these are the only 2 options open to me.
i'm not sure what to do and know I have one shot at this.
Any advice would be gratefully received.
thanks
About to put my pension into drawdown and have the option of taking 25% lump sum or taking all future drawdowns with 25% of it Tax free.
Taking a large lump sum brings its own problems, I'already paid of my mortgage and don't have any real debts, if I took the lump sum I would probably stick it in a fixed rate savings account paying 5% if I'm lucky, then having the Tax implications unless i fed it into ISA's which would take a few years.
Leaving the money invested in the Drawdown account allows me to take 25% of each drawdown invested which sounds attractive.
Just to add, these are the only 2 options open to me.
i'm not sure what to do and know I have one shot at this.
Any advice would be gratefully received.
thanks
0
Comments
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you could transfer it to a product that gives more than just those 2 options.
If you don't need the big lump sum then taking slices where each slice is 25% tax free and 75% taxable makes more sense.
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All views are my own and not the official line of MoneySavingExpert.1 -
Leaving the money invested in the Drawdown account allows me to take 25% of each drawdown invested which sounds attractive.Its the most common method we advise on.Just to add, these are the only 2 options open to me.Never let your existing provider limit the options in a way that handicaps or disadvantage you. Transfer to another provider if they don't offer what you need.
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 -
There are numerous threads on the forum on this topic.
Plus you can book a free chat with PensionWise.
Help with taking your pension | MoneyHelper
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Do your normally advise your customers to take the 25% Tax free element as part of drawdown?dunstonh said:Leaving the money invested in the Drawdown account allows me to take 25% of each drawdown invested which sounds attractive.Its the most common method we advise on.Just to add, these are the only 2 options open to me.Never let your existing provider limit the options in a way that handicaps or disadvantage you. Transfer to another provider if they don't offer what you need.0
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