What to do with trivial pots

Linuxgeek

on my 3 year countdown to leaving at 60 
have 2 main pots with a combined value of £350k which I plan to draw on and top up from my sticks ISA 

Discovered I have 3 small pots with about £2.5 k in each know I could cash them in first year of retirement or transfers to main pot.

But wondering if I should fund these with the monthly money currently putting in stocks ISA but keep them under the £10K limit, 

As I'm 57 could access them at anytime and would get the tax relief when paying in. 

Marcon

What's your main objective? 

ali_bear

Do you actually need to cash in any of those pensions before retirement? Would you semi-retire with the possibility of going back into paid work? 

If the answer to both of those is no, there is not much point in taking the small pots withdrawals. You're in no danger of breaching the TFLS limit anyway. 

But if you can afford to make greater pensions contributions in the run up to retirement, that is you can defer the income until after retirement, then it does pay to do so. 

kempiejon

I tend to complicate things to gain every possible tax advantage. As a forethought, depending upon local circumstances there's a likelihood of squeezing an extra shekel by leveraging the tax relief for pensions. Adding the maximum into the work pension, if possible by salary sacrifice to minimum wage and making the balance in personal contributions into a SIPP up to £60k or relevant earnings max so spending down savings/ISAs to cover expenses.
Taking the lump sums for living costs to enable maximum contributions looks a more tax efficient use of possible incomes and keeps the ISAs intact. Look at how pension recycling regulations could affect this.
Understand the MPAA rules as taking any taxable income ie not the 25% lump sum(s) from the orphaned pensions would trigger a limit to further contributions.

DRS1

kempiejon said:

I tend to complicate things to gain every possible tax advantage. As a forethought, depending upon local circumstances there's a likelihood of squeezing an extra shekel by leveraging the tax relief for pensions. Adding the maximum into the work pension, if possible by salary sacrifice to minimum wage and making the balance in personal contributions into a SIPP up to £60k or relevant earnings max so spending down savings/ISAs to cover expenses.
Taking the lump sums for living costs to enable maximum contributions looks a more tax efficient use of possible incomes and keeps the ISAs intact. Look at how pension recycling regulations could affect this.
Understand the MPAA rules as taking any taxable income ie not the 25% lump sum(s) from the orphaned pensions would trigger a limit to further contributions.

But not if he's using the small pots provisions to take the money.

kempiejon

yes, good catch.