TFLS at £268275 + adding extra when retired

CRAIGSVILLE1

Hi all,

When I come to retirement, is there any advantages keeping my TFLS in my pension wrapper , if I'm at the £268275 max, as it won't grow anymore? 
And also, is there any point adding the extra £2880 to my pension when retired , if I take it back at 20%, with no growth ? 

Thanks 

DRS1

Well you never know some future Govt may abolish the Lump Sum Allowance or raise it to £500k.

Marcon

CRAIGSVILLE1 said:

Hi all,

When I come to retirement, is there any advantages keeping my TFLS in my pension wrapper , if I'm at the £268275 max, as it won't grow anymore? 
And also, is there any point adding the extra £2880 to my pension when retired , if I take it back at 20%, with no growth ? 

Thanks 

You can add a bit more by having up to 3 personal pensions*, each of no more than £10K at the time you withdraw the whole of each pot (fine to take them in the same or different tax years), and provided you do so using the 'small pots' regime you can take 25% tax free from each pot - doesn't count towards the LSA. The other advantage of 'small pots' is that it doesn't trigger the Money Purchase Annual Allowance.

*You can take an unlimited number of 'small pots' from occupational schemes provided each 'pot' completely extinguishes your benefits under that scheme, so in practice it's unusual to have more than one 'occupational' pot

CRAIGSVILLE1

I forgot about the small pots thing.
Thanks, every little helps :-) 

Albermarle

CRAIGSVILLE1 said:

I forgot about the small pots thing.
Thanks, every little helps :-) 

Be aware that not all pension providers offer the facility to withdraw under the Small Pots Rule. Then only a few allow you to split off three small pots from a bigger one, and these are mostly ones used by financial advisors. I think only HL offer this facility direct to customers.

CRAIGSVILLE1

Albermarle said:

CRAIGSVILLE1 said:

I forgot about the small pots thing.
Thanks, every little helps :-) 

Be aware that not all pension providers offer the facility to withdraw under the Small Pots Rule. Then only a few allow you to split off three small pots from a bigger one, and these are mostly ones used by financial advisors. I think only HL offer this facility direct to customers.

Yep, I have a few pensions open for the recent cashback bonuses, including HL + fidelity, which do this. My Scottish widows workplace pension does this also, so will wind them down to below £10k each nearer my retirement.
Thanks

Albermarle

CRAIGSVILLE1 said:

Albermarle said:

CRAIGSVILLE1 said:

I forgot about the small pots thing.
Thanks, every little helps :-) 

Be aware that not all pension providers offer the facility to withdraw under the Small Pots Rule. Then only a few allow you to split off three small pots from a bigger one, and these are mostly ones used by financial advisors. I think only HL offer this facility direct to customers.

Yep, I have a few pensions open for the recent cashback bonuses, including HL + fidelity, which do this. My Scottish widows workplace pension does this also, so will wind them down to below £10k each nearer my retirement.
Thanks

I think if you have a bigger pension that you reduce to less than £10K, it does not qualify for withdrawal under the small pots rule AFAIK.
HL will split off three new pots, but I do not think Fidelity will.
They will only allow a small pots withdrawal if the pot has never been bigger than £10K. That is my understanding but could be wrong.

CRAIGSVILLE1

Albermarle said:

CRAIGSVILLE1 said:

Albermarle said:

CRAIGSVILLE1 said:

I forgot about the small pots thing.
Thanks, every little helps :-) 

Be aware that not all pension providers offer the facility to withdraw under the Small Pots Rule. Then only a few allow you to split off three small pots from a bigger one, and these are mostly ones used by financial advisors. I think only HL offer this facility direct to customers.

Yep, I have a few pensions open for the recent cashback bonuses, including HL + fidelity, which do this. My Scottish widows workplace pension does this also, so will wind them down to below £10k each nearer my retirement.
Thanks

I think if you have a bigger pension that you reduce to less than £10K, it does not qualify for withdrawal under the small pots rule AFAIK.
HL will split off three new pots, but I do not think Fidelity will.
They will only allow a small pots withdrawal if the pot has never been bigger than £10K. That is my understanding but could be wrong.

Even if the value over the £10k it is transferred to another pension before any withdrawal ?