Should I start planning to move money from my SIPP to ISAs?

WitsEnd101

As someone who stopped working last year with similar mix of DB and other savings to you, I can certainly recommend it.  

Do you actually want to stop working?

Was your early retirement unplanned?

That's an interesting question that I am currently trying to figure out. Out of boredom I applied for a job a week or so ago. I got offered to move to next stage of doing a personality test etc and I immediately thought sod that. I am told that it is worth seeing how you feel in the winter time when the appeal of the outdoors is somewhat diminished.

I had been thinking of early retirement for a while without knowing what it would actually look like. 2025 seemed like a good time as that would be 40 years of working and training.

Does your OH have any assets or entitlements that should be considered for your planning purposes?

She hits 60 later this year but is thinking of going down the partial retirement for another few years. She has a healthy DB pension too.

kimwp

There's always volunteering as well, the advantage being you can more easily pick and choose your working hours/months 

leosayer

The great thing is that you both seem to be in the position to be able to choose whether to work or not.

My OH and I are both pretty proactive in arranging holidays, days out, meeting with friends and generally filling our days with interesting stuff. I would certainly recommend making a list of things you want to do and places you want to go and then start doing those even if it's unexciting stuff like finishing that DIY project, reading a book or learning more about retirement planning and tax. For us, work seemed to get in the way of those things.

Right now I have no interest in returning to work but who knows what the future may bring?

We both stopped work in December so spent the winter not working. We certainly became more aware of the shorter days but living in London means we're probably less impacted by the darker and grimmer weather than those living in more rural or northern parts. Holidays in Siciliy, Tenerife and Malta helped certainly to topup or vitamin D levels.

I wouldn't recommend 'splurging' if you're not normally that way inclined but within 2 months of us stopping work, we started planning upgrades to our home which we hope will see us through for the next 10-20 years or so. That will eat a good chunk of our retirement savings but I'm comfortable it won't impact our desired standing of living.

WitsEnd101

kimwp said:

There's always volunteering as well, the advantage being you can more easily pick and choose your working hours/months 

Kim, volunteering is my plan should I decide to not go back to the daily grind. I have recently happened upon Reach Volunteering which has some interesting roles. Having said that, I still wake up in the morning feeling slightly guilty for not starting a days work.

Triumph13

I can understand your nervousness about the MPAA, but do the sums.  Each year you hold off is £24k of your pension that moves from 20% to 40% tax, so a net cost of just under £5k.  If you do go back to work, how much is being able to contribute more than £10k pa to a DC scheme going to save you?

Also, does your OH have a job that can be done remotely?  If so, then there are lots of nice warm places you could afford to spend chunks of the winter.

WitsEnd101

Triumph13 said:

I can understand your nervousness about the MPAA, but do the sums.  Each year you hold off is £24k of your pension that moves from 20% to 40% tax, so a net cost of just under £5k.  If you do go back to work, how much is being able to contribute more than £10k pa to a DC scheme going to save you?

Also, does your OH have a job that can be done remotely?  If so, then there are lots of nice warm places you could afford to spend chunks of the winter.

These comments have been incredibly helpful and challenging to my assumption that I should return to work after a bit of a hiatus. 

Based on the above I should probably assess my income from both work and pensions up to the end of Mar 25 and take an ufpls of £50,270 less the income plus the 25% TFC. Does that sound about right? 

kimwp

WitsEnd101 said:

kimwp said:

There's always volunteering as well, the advantage being you can more easily pick and choose your working hours/months 

Kim, volunteering is my plan should I decide to not go back to the daily grind. I have recently happened upon Reach Volunteering which has some interesting roles. Having said that, I still wake up in the morning feeling slightly guilty for not starting a days work.

Why do you feel guilty?

MallyGirl

Don't leave it too close to the end of March as these things aren't instant.
I was thinking of taking £3k via a small pot to ensure that I used the 0% tax band without invoking the MPAA. I earned approximately £9k before my redundancy as I made significant Sal sac pension contributions. 

I am now about 7 weeks in (out) and can't see me changing my mind so I am now thinking of doing a bigger UFPLS to use the 20% band instead. 

WitsEnd101

Why do you feel guilty?

I said "slightly guilty". I think its because I know some colleagues of similar age who were a bit envious that they have years to go before they can afford to pull the trigger themselves.

WitsEnd101

MallyGirl said:

Don't leave it too close to the end of March as these things aren't instant.

My SIPP is with ii so would be interested in any views on when to initiate the ufpls request. Is the end of Feb cutting it fine?