DB pension now uses up tax free allowance - even though no tax free cash taken?

Albermarle

GC1234567 said:

DRS1 said:

GC1234567 said:

So basically I'm stuffed.

It's highly unlikely I'll reach the 268k limit, unless the markets go crazy (crazy in an upwards direction that is) but I guess if that's likely to happen I could just withdraw all my tax-free component from my various DC schemes if thay are getting close to the DC limit. 

Yes but isn't the point that it is no longer 268k for you but a lower amount so you don't have the headroom you may have thought you had.

Yes, in this instance, if my DB benefit took up, say 100k of the 268k allowance, then that would leave me, as I understand it, with 168k tax free left. Now, the remaining tax free portion of my SIPPs are a fair way short of that. If, however, by some miracle my SIPPs perform in a stellar fashion over the next few years, and the tax free portion was in danger of breaching that 168k figure, then I guess my best option would be to  immediately take all the tax free component of my schemes so they never reached  that 168k, and leave the rest to grow. 

I just wish I had know about TTFCs a month ago!

I only knew about it from reading this forum regularly, so it has its uses !

GC1234567

Albermarle said:

GC1234567 said:

DRS1 said:

GC1234567 said:

So basically I'm stuffed.

It's highly unlikely I'll reach the 268k limit, unless the markets go crazy (crazy in an upwards direction that is) but I guess if that's likely to happen I could just withdraw all my tax-free component from my various DC schemes if thay are getting close to the DC limit. 

Yes but isn't the point that it is no longer 268k for you but a lower amount so you don't have the headroom you may have thought you had.

Yes, in this instance, if my DB benefit took up, say 100k of the 268k allowance, then that would leave me, as I understand it, with 168k tax free left. Now, the remaining tax free portion of my SIPPs are a fair way short of that. If, however, by some miracle my SIPPs perform in a stellar fashion over the next few years, and the tax free portion was in danger of breaching that 168k figure, then I guess my best option would be to  immediately take all the tax free component of my schemes so they never reached  that 168k, and leave the rest to grow. 

I just wish I had know about TTFCs a month ago!

I only knew about it from reading this forum regularly, so it has its uses !

I count myself as being pretty clued up about SIPPs and pensions in general, but this completely passed me by. I do wonder how well known this issue is, and whether others will find themselves in the same boat in the years ahead. I am sure I will not be the only one caught out.

DRS1

Yes same here.  It was only when I was asked if I had one that I found out what it was.  I was relieved to find I did not need one.

Albermarle

GC1234567 said:

Albermarle said:

GC1234567 said:

DRS1 said:

GC1234567 said:

So basically I'm stuffed.

It's highly unlikely I'll reach the 268k limit, unless the markets go crazy (crazy in an upwards direction that is) but I guess if that's likely to happen I could just withdraw all my tax-free component from my various DC schemes if thay are getting close to the DC limit. 

Yes but isn't the point that it is no longer 268k for you but a lower amount so you don't have the headroom you may have thought you had.

Yes, in this instance, if my DB benefit took up, say 100k of the 268k allowance, then that would leave me, as I understand it, with 168k tax free left. Now, the remaining tax free portion of my SIPPs are a fair way short of that. If, however, by some miracle my SIPPs perform in a stellar fashion over the next few years, and the tax free portion was in danger of breaching that 168k figure, then I guess my best option would be to  immediately take all the tax free component of my schemes so they never reached  that 168k, and leave the rest to grow. 

I just wish I had know about TTFCs a month ago!

I only knew about it from reading this forum regularly, so it has its uses !

I count myself as being pretty clued up about SIPPs and pensions in general, but this completely passed me by. I do wonder how well known this issue is, and whether others will find themselves in the same boat in the years ahead. I am sure I will not be the only one caught out.

As the majority of people are pretty clueless about pensions generally, then I am sure it will pass them by.
Although it only affects a small minority with a Million Pounds + of pension provision.
I guess if you were paying an advisor they would have told you what to do.