Most tax efficient way to withdraw money from all pensions pots

singhini

When i turn 55 in 18 months i want to start to withdraw money from my private pensions and ideally want to liquidate the lot in 10 years without paying any tax (In year 11 i will start to take my state pension).

Ive got 9 pensions (1 is DB, the others are all BC).

DB = £108,000
DC = £26,000
DC = £2,000
DC = £82,000
DC = £8,000
DC = £65,000
DC = £7,000
DC = £1,000
DC = £1,000
TOTAL = £300,000

I'm thinking to take 25% TFLS = £75,000 But not touching the DB pot but from the other BC pots,
Then take £12,500 annually each year thereafter still from the BC pots.

Year 11 i take state pension £11,500 plus DB pension which is £4,500  (paying some tax).

Question 1: can i take my 25% / £75,000 from just the BC pots without touching the DB pot?
Question 2: can i take £12,500 x 9 years from the BC pots without paying tax?
Question 3: is there a better way to access the money without paying tax?

NB: i know values and annual allowances can change year by year but principally is the objective of trying to empty the pension pots ASAP without paying tax achievable? 

Keep_pedalling

The DB pension does not have a pot, so you can’t include that in your total pot.

singhini

Oh dear!
That means my "pot" is £192,000 and 25% of that is £48k TFLS
Year 2 = £144,000 "pot" less £12,500 for 9 years = £31,500 still left in the pot by year 10

Cobbler_tone

You can take 25% of DB (tax free) but the pension will also kick in…or leave that alone until you need it. Just make sure you check the scheme rules.

molerat

Why do you want / what are you going to do with the tax free sum ?

You could take £16760 each year from the DC pots without paying tax if you don't take the tax free amount up front.

You could then put £2880 each year into a SIPP and get £720 added to it and withdraw the £3600 as part of your £16760 the next year.

£13880 to spend at a cost of £13160 to your pots each year.

Hoenir

Cobbler_tone said:

You can take 25% of DB (tax free)

Are you sure that is statement is factually correct. 

artyboy

Hoenir said:

Cobbler_tone said:

You can take 25% of DB (tax free)

Are you sure that is statement is factually correct. 

I think we know that it isn't...

DB schemes each have their own rules that may or may not allow a tax free lump sum to be taken on commencement. But as there is no 'pot', the notion of it being any percentage is effectively meaningless - it simply represents a trade off with a reduction in monthly payments as a result.

Keep_pedalling

Is there a reason you want to spend retirement with such a low income? Are you unable to spend a few more years working to build a larger pension? 

singhini

There's only me and the cat so i need to use up my savings, equity in my house and my private pensions.

£180k savings
£120k equity in house (im currently in the process of downsizing and this amount is coming to me)
£300k in private pensions
aged 53

At 65 i will receive full state pension so i need to start access my funds

Hoenir

artyboy said:

Hoenir said:

Cobbler_tone said:

You can take 25% of DB (tax free)

Are you sure that is statement is factually correct. 

I think we know that it isn't...

DB schemes each have their own rules that may or may not allow a tax free lump sum to be taken on commencement. But as there is no 'pot', the notion of it being any percentage is effectively meaningless - it simply represents a trade off with a reduction in monthly payments as a result.

Little point in addressing your comments at me as simply sends the discussion off course. Nor assuming that everybody is as well informed. 

singhini

molerat said:

Why do you want / what are you going to do with the tax free sum ?

You could take £16760 each year from the DC pots without paying tax if you don't take the tax free amount up front.

You could then put £2880 each year into a SIPP and get £720 added to it and withdraw the £3600 as part of your £16760 the next year.

£13880 to spend at a cost of £13160 to your pots each year.

Genius

Google search suggest:
75% of £16,760 is £12,570
£25% is the drawdown = £4,190

Then stick £2,880 back in 

Brilliant