Is this Logical?

sgx2000

Hi Everyone...

I would appreciate any comments, corrections, reality checks or potential problems….

I am 65 (66 in March)

I took Voluntary Redundancy 7 months ago.

LGPS  pension                                                                 £8036

Aviva Workplace DC pension fund                                  £149K

 

I plan to take UFPLS monthly payments from Aviva for the next financial year

 (to allow max. Tax free income 2025-26) as per below.

Then switch to a FAD  or  Small £40K Annuity and Fad with the rest

 

TAX ALLOWANCE                                                          £12,570.00

LGPS INCOME GROSS (DB)                                         £8,036.31

AVIVA (DC) INCOME WITHIN TAX ALLOWANCE          £4,533.69

TOTAL DRAWNDOWN  Including TFC                           £6,044.92

UFPLS  DRAWDOWN MONTHLY                                  £503.74

TOTAL TAX FREE INCOME FOR 2015                        £14,081.23

MONTHLY NET INCOME FROM PENSIONS               £1,173.44

 

My Pensions Income will then be ‘topped up’ from my redundancy for the 2025-26 year

Then from April 2026 State Pension will start

cfw1994

Looks about right to me.
You could alternatively take 25% of the DC pot and a lower amount, if you wanted to perhaps pop some into PBs to get more of a lump of cash you can get your hands on (eg, for new boiler, car repairs/replace, holiday etc), but otherwise crack on.

I’m sure HMRC will b*gger something up and force you to contact them to correct, but otherwise sound 👍

sgx2000

Many thanks for the reply

Got emergencies etc covered - savings, ISA,  PB's etc

And I too would be amazed if HMRC get it right  (dont know whther to start it in March or April)

NoMore

Well your calculations work out right for maximum zero tax UFPLS withdrawal, but is that actually enough for you with the redundancy top up ? Only you can answer that. You could get a higher tax free via FAD where the amount of tax free cash you take from the Pension is uncoupled from the amount of taxable. Or perhaps it might even work out that paying some tax is better, without your full financial picture and plan going forward its hard to say.

Also monthly UFPLS is a rare beast in Pensions for automation I believe. You may need to admin this yourself every month, you will need to check with Aviva.

sgx2000

I will give Aviva a call today.
But their website says it is possible

Once I have got this sorted, I plan to find some file sharing site - and I will post my full retirement spreadsheet for review

cfw1994

Some folk do single lump draws once a year in March….I *believe* it causes less HMRC grief, but can’t speak from experience.
Good luck!

sgx2000

Just spoke to Aviva

Ufpls is ok,  but Adhoc (by Telephone)
Or
Move to their SIPP (which allows monthly UFPLS payment)

sgx2000

cfw1994 said:

Some folk do single lump draws once a year in March….I *believe* it causes less HMRC grief, but can’t speak from experience.
Good luck!

Ah...... But this would be making the whole UFPLS withdrawl in this finacial year ... which negates the whole trying to use up all the personal allowance 2025-26

I may just be better to UFPLS the £6044 in the new tax year, and obviously then have to contact HMRC when they get it wrong

LHW99

Any possibility / benefit in getting some / all of the redundancy money paid into your pension?

There are threads here on that I think, and

https://www.thisismoney.co.uk/money/pensions/article-9119147/Is-worth-putting-redundancy-money-pension.html

discusses it

sgx2000

Thanks for the reply

I tried to get the company to pay my redundancy money into the pension as an employers contribution.
But they didnt want to know...

I have however topped up the pot to my earned income for the year (5 months)
I did the same last year
It added both my contributions and £10k in tax relief
I was happy with that.