Help with working out balance remaining of pension lump sum allowance

Hattie627

I didn't crystallise any pensions before 6th April 2006.

Between 6th April 2006 and 5th April 2024, I crystallised one DB pension. This was in March 2011. The total value of the benefits taken then was £475,506. The amount of LTA used then was 26.41% (the LTA ceiling then being £1.8 million). The tax-free lump sum taken was £76,964 (that is, less than 25% of the total benefits taken).

I have two uncrystallised DC pensions, one currently worth £240,000 and one currently worth £52,000.

Would I benefit from obtaining a transitional lump sum tax certificate in advance of putting either (or both) of my DC pensions into drawdown and taking 25% tax free lump sums? Or would the standard calculation work better for me? I can't get my head around the figures but I understand that if I apply for the certificate it will overrule me using the standard calculation if the certificate is to my disadvantage. I know that I am far below the current LSA figure, even with the 2 DC pensions,  but I'm thinking in terms of the LSA being lowered possibly and/or the values of my 2 DC pensions substantially increasing before being touched.

Any help would be appreciated.

Notepad_Phil

Hattie627 said:

... I know that I am far below the current LSA figure, even with the 2 DC pensions,  but I'm thinking in terms of the LSA being lowered possibly and/or the values of my 2 DC pensions substantially increasing before being touched. ...

I'm in a similarish pension position and for me the big question is, 'are you thinking of taking any of the tfls anytime soon'? If not then I personally don't see any reason to rush into anything. If the LSA does get lowered (which I reckon will not happen) then you can just get the transitional certificate at that time, same goes if the market shoots up.

My own current plan is to leave my uncrystallised pensions alone for at least 2 budgets (i.e. at least 18 months), before starting to take tax-free amounts and adding them to stocks and shares ISAs for Mrs Notepad and myself. Meanwhile I'll just keep an eye on things, and only if absolutely necessary would I personally think of getting the transitional certificate.

DRS1

I don't know if this might help
Transitional tax-free amount certificates – an explanation - Royal London for advisers

It does sound as if you may be a candidate for a certificate but it may depend on how much you add to your DC pensions