Take tax free lump sum before the budget

Teaandscones

Given the shortfall in government funding after the PIP funding debacle, should i take my lump sum from my SIPP now (even though i don't need it yet) given that if i don't take it it will cost me over 50k if taxed

Dazed_and_C0nfused

Teaandscones said:

Given the shortfall in government funding after the PIP funding debacle, should i take my lump sum from my SIPP now (even though i don't need it yet) given that if i don't take it it will cost me over 50k if taxed

Is making such a significant decision based on speculation a sensible to approach your finances 🤔

Nebulous2

Where will you put it? 

What will it cost you in lost growth? 

The same thing happened last year. Fuelled by press speculation lots of people withdrew their tax-free money. 

Following the budget many people tried to put it back, with some companies agreeing, and others refusing. 

PattiTelongo

Teaandscones said:

Given the shortfall in government funding after the PIP funding debacle, should i take my lump sum from my SIPP now (even though i don't need it yet) given that if i don't take it it will cost me over 50k if taxed

Some people need to be saved from themselves. Why would you take important financial decisions with potentially far reaching consequences based on tittle tattle in the media?  I’m sure if there are any changes announced in future budgets enough lead time will be given to plan for such eventualities. 

ali_bear

Oh - this one again.

Answer is no. 

kempiejon

Teaandscones said:

Given the shortfall in government funding after the PIP funding debacle, should i take my lump sum from my SIPP now (even though i don't need it yet) given that if i don't take it it will cost me over 50k if taxed

Ah, given the shortfall in government funding aftrer the PIP debacle you're very kind to do the governement a favour and offer an extra £50k in tax, more altruists like you might help close the shortfall. I think there were some helpers cashing in before the budget weren't there too?

Marcon

PattiTelongo said:

Teaandscones said:

Given the shortfall in government funding after the PIP funding debacle, should i take my lump sum from my SIPP now (even though i don't need it yet) given that if i don't take it it will cost me over 50k if taxed

Some people need to be saved from themselves. Why would you take important financial decisions with potentially far reaching consequences based on tittle tattle in the media?  

Be fair - they are also asking other people to speculate on what might happen in the next budget, so have clueless guesswork as well to aid their decision making!

EdSwippet

Marcon said:

PattiTelongo said:

Teaandscones said:

Given the shortfall in government funding after the PIP funding debacle, should i take my lump sum from my SIPP now (even though i don't need it yet) given that if i don't take it it will cost me over 50k if taxed

Some people need to be saved from themselves. Why would you take important financial decisions with potentially far reaching consequences based on tittle tattle in the media?  

Be fair - they are also asking other people to speculate on what might happen in the next budget, so have clueless guesswork as well to aid their decision making!

Whoa there! Clueless guesswork is clearly good enough for the government, so it should be good enough for the rest of us.

jim8888

Surely we'd have to be given notice of such a fundamental change, and allow us to make plans accordingly? The TFLS was a massive part of my retirement planning, I'd have been incandescent if the rules changed overnight, and I'm sure many other voters would be too.

ali_bear

That's one of the reasons why it won't happen. 

Unfortunately clueless guesswork is now the business model of some mainstream media outlets. They have to compete with all the idiotic nonsense that permeates the interwebs. 

Aretnap

jim8888 said:

Surely we'd have to be given notice of such a fundamental change, and allow us to make plans accordingly? The TFLS was a massive part of my retirement planning, I'd have been incandescent if the rules changed overnight, and I'm sure many other voters would be too.

Not saying that it's likely to happen, but if a cut to the tax free lump sum were to be implemented, it's the type of tax change which would likely to come into force immediately. Precisely to avoid the scenario where everybody in the country who is over 55 and has a large pension takes the full amount before the change comes into effect, and avoiding the tax it's supposed to raise.

It's quite common for tax rises to come into force immediately if they could be easily avoided by rearranging your affairs. Increases to capital gains tax are an obvious one which tend to be brought in with little or no notice.