Access DC pot now to avoid 40% tax when I get state pension

Goodproblemtohave

I'm a 58 year old currently receiving c £40k pa from a DB pension. I pay 20% income tax on the element of this pension over my £12,570 personal allowance. I qualify for a full state pension of c £12k pa when I reach age 67.
I also have a DC pension which I'm yet to access of c £125k.
I feel it would be prudent to start to draw down my DC pot now taking approx £10k pa taking my annual income to £50,270pa which is the maximum before having to pay 40% tax.
The plan is to exhaust my DC Pension just as I receive the state pension. This should I think minimise any income taxable at 40%.
Am I missing anything ? Does it sound like a good plan ?
I spent a few hours yesterday during the storm and understand (I think!) the MPAA rule and LTA rule (no dramas for me) and understand I may miss out on some DC pension pot growth but the tax saving seems to good to not take.
Really appreciate peoples thoughts.

Triumph13

Absolutely.  And don't worry about missing out on growth - you could always invest what you draw in a S&S ISA in exactly the same types of investments as in your pension, so tax is the only thing to even think about in this situation.

Dazed_and_C0nfused

This may not be of interest for you but you can always (until you're 75) add £3,600 (gross) each year and have an increased basic rate band to mitigate higher rate tax.

Goodproblemtohave

Thank you both so much. 
Dazed_and_C0nfused - I've done the £3600 (gross) thing the last 2 years and it was from previously reading advice you gave someone else so massive thanks. Couldn't thank you then as only signed up to the forum yesterday to ask my question ! I'd have never heard of it. Think I've saved £k's thanks to other posts from you in the tax forum so thank you. Am sure there are many others very grateful for your knowledge !

Dazed_and_C0nfused

Goodproblemtohave said:

Thank you both so much. 
Dazed_and_C0nfused - I've done the £3600 (gross) thing the last 2 years and it was from previously reading advice you gave someone else so massive thanks. Couldn't thank you then as only signed up to the forum yesterday to ask my question ! I'd have never heard of it. Think I've saved £k's thanks to other posts from you in the tax forum so thank you. Am sure there are many others very grateful for your knowledge !

Not "advice" as such, just something for you to think about 😉

And thanks 😀

Cobbler_tone

Goodproblemtohave said:

I'm a 58 year old currently receiving c £40k pa from a DB pension. I pay 20% income tax on the element of this pension over my £12,570 personal allowance. I qualify for a full state pension of c £12k pa when I reach age 67.
I also have a DC pension which I'm yet to access of c £125k.
I feel it would be prudent to start to draw down my DC pot now taking approx £10k pa taking my annual income to £50,270pa which is the maximum before having to pay 40% tax.
The plan is to exhaust my DC Pension just as I receive the state pension. This should I think minimise any income taxable at 40%.
Am I missing anything ? Does it sound like a good plan ?
I spent a few hours yesterday during the storm and understand (I think!) the MPAA rule and LTA rule (no dramas for me) and understand I may miss out on some DC pension pot growth but the tax saving seems to good to not take.
Really appreciate peoples thoughts.

I'll be in a similar situation at 57 next year with less of a DB but more DC. I plan to draw down the DC before reaching SPA. I guess a fixed term annuity (after TFLS) would take any 'thinking' out of the situation but may not deliver the best return.

Albermarle

I spent a few hours yesterday during the storm and understand (I think!) the MPAA rule and LTA rule (no dramas for me)

The LTA rule does not cause any dramas for anybody, as it was abolished by Jeremy Hunt !

Goodproblemtohave

Trust me it can do if you took a tax free lump sum out before it changed and like me would now like to take out a further lump sum. 
Transitional tax-fee certificates are a deep joy to fathom !!

Albermarle

Goodproblemtohave said:

Trust me it can do if you took a tax free lump sum out before it changed and like me would now like to take out a further lump sum. 
Transitional tax-fee certificates are a deep joy to fathom !!

These certificates usually relate to someone who has taken a DB pension previously, but did not take the tax free cash.

pterri

Goodproblemtohave said:

I'm a 58 year old currently receiving c £40k pa from a DB pension. I pay 20% income tax on the element of this pension over my £12,570 personal allowance. I qualify for a full state pension of c £12k pa when I reach age 67.
I also have a DC pension which I'm yet to access of c £125k.
I feel it would be prudent to start to draw down my DC pot now taking approx £10k pa taking my annual income to £50,270pa which is the maximum before having to pay 40% tax.
The plan is to exhaust my DC Pension just as I receive the state pension. This should I think minimise any income taxable at 40%.
Am I missing anything ? Does it sound like a good plan ?
I spent a few hours yesterday during the storm and understand (I think!) the MPAA rule and LTA rule (no dramas for me) and understand I may miss out on some DC pension pot growth but the tax saving seems to good to not take.
Really appreciate peoples thoughts.

I’m in a similar position, I’m not drawing my DB yet (I’m 57 and will draw circa £40k at 60, £40k now and will increase with RPI). I’m drawing a pension now from my SIPP and will likely draw more than I need and put the surplus into my ISA before SP age where I’ll be a higher rate payer. I’ll also have an AVC pot at DB age so need to get that into an ISA as fast as I can before SP age. As you say it’s a nice problem so not complaining.