Most tax efficient way to withdraw money from all pensions pots

singhini

Lots of responses since i last posted - thankyou to everyone for your help

Yes, most of the savings are in ISA's

@HappyHarry + @eastcorkram Thanks for the link, oh dear, your right it will be 67 (i just assumed it would be 10 years after accessing private pension). Heyho, the upside is i now get 12 years to drawdown from private pension rather than just 10

@dunstonh "Why do you think you would be that 1 in 10?" i know nothing about the 1 in 10 (other than its a UB40 song). What i do think is £4,500 annual pension is rubbish. Why do you think its good?

@Cobbler_tone "I think the important thing is that the OP now realises that they need to consider their DB pension differently to their numerous DC ones". Yes i now realise this thanks

molerat

@dunstonh "Why do you think you would be that 1 in 10?" i know nothing about the 1 in 10 (other than its a UB40 song). What i do think is £4,500 annual pension is rubbish. Why do you think its good?

It will be a guaranteed amount so useful for planning purposes.  It will likely be good value for the CETV amount compared to what you could get for that especially after the cost of required advice and the difficulty of finding someone that will give that advice and finding a provider that will take it.  I have one DB that pays me just over £2K pa, not a lot but it is regular guaranteed income with a known annual increase.

MallyGirl

Same here. I have just one DB which will pay out approx £3k at age 60 - I just think of it as 'the fuel bill will always be paid'. Having said that, I installed solar/battery last year so I think it will cover the water bill and TV licence now too.

singhini

@molerat i emailed the pension company last night to get the latest figures.
The info i have from 2017 suggested the CETV was £108,000 and the annual pension was £4,500 (that just feels rubbish........ i'm just human and all i see is £4,500 a year versus have £108,000 to basically go away i.e. transfer it out to say a SIPP..... atleast i could then drawdown the money in chunks. However the obstacle is getting a financial advisor to agree this........ and i ain't paying for the advise

The "planning" comment is a good point.

This thread has helped in that i need to consider my DB pension differently to the numerous DC ones

Pat38493

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.

But I think that technically there is a  kind of calculation that you can do to calculate the maximum PCLS that could be tax free for a particular pension amount - I found the formula somewhere on the internet once and put it into one of my myriad spreadsheets, and it calculated almost exactly to the penny the maximum PCLS that my DB quote had on it.  Acknowledged though that in some cases, the scheme rules might say that no lump sum or a lesser amount is available, I think there is an HMRC formula for the maximum that can be tax free?

singhini

@MallyGirl i like your thinking

It must just be me, but IMHO that's 3 examples of rubbish DB pensions..... one paying £2k, another paying £3k and mine paying £4.5k 
Doesn't sound very impressive. 

EDIT:  In 15ish years time £4.5k wont get you a loaf of bread   Just remembered its index linked pension Doh! 

Heyho, i will stop my moaning 

Hoenir

singhini said:

The info i have from 2017 suggested the CETV was £108,000 and the annual pension was £4,500 (that just feels rubbish........ 

Times have changed somewhat since then. Worthless basing important decisions on outdated information. That is rubbish. Obtain another CETV. Suspect that you are for a major shock. 

Worth also checking what guarantees,  if any, your DB pension will benefit from when in payment. 

DRS1

singhini said:

@MallyGirl i like your thinking

It must just be me, but IMHO that's 3 examples of rubbish DB pensions..... one paying £2k, another paying £3k and mine paying £4.5k 
Doesn't sound very impressive. 

EDIT:  In 15ish years time £4.5k wont get you a loaf of bread   Just remembered its index linked pension Doh! 

Heyho, i will stop my moaning 

Yes but when does your £4,500 start to be paid?  Not at age 70
And I see you have cottoned on to the pension increases point I was going to make - of course a loaf of bread will either cost more in 15 years or it will have shrunk to the size of a biscuit.  With luck the pension will keep pace with the increase in the price of bread (and water).

singhini

Hoenir said:

singhini said:

The info i have from 2017 suggested the CETV was £108,000 and the annual pension was £4,500 (that just feels rubbish........ 

Times have changed somewhat since then. Worthless basing important decisions on outdated information. That is rubbish. Obtain another CETV. Suspect that you are for a major shock. 

Worth also checking what guarantees,  if any, your DB pension will benefit from when in payment. 

Emailed them last night (apparently it can take a few months for the info to be sent to me). knowdoubt i will be back for further help. 

DRS1

Oh and while you are checking figures you might want to check your state pension.  Do you need to fill years between 55 and 67 to get the full amount?  You can see this in the bit below the top line saying how much you should get - eg it may say this figure assumes you will contribute for X years before 2037. Based on contributions up to April 2024 you will get Z.