TFLS withdrawal before Autumn budget

Steve182

I've decided to withdraw all of mine, and do a bit of recycling, well below the allowable limit, to take full advantage of the £268K allowance in case it's reduced, which I fear it will be.

Doesn't take too long to use the money sensibly, pay off mortgage, ISAs, a bit of pension recycling, investment in growth shares (sell before £3K CGT limit reached) etc etc

Just wondering if any others here are doing or considering the same?

HedgehogRulez

Interesting! No, no-ones mentioned the topic before.

ali_bear

I see the Torygraph and Faily Hate are both now calling on the chancellor to rule out changes in the TFLS allowance before the budget. It is almost as if someone was stoking up speculation there would be a reduction? 

"The words you hear on the wind are not the wind itself, nor the waves and tides of the sea on which we sail."

cfw1994

HedgehogRulez said:

Interesting! No, no-ones mentioned the topic before.

😂
My money is on the limit remaining exactly as it is……but if I still had any TFLS, I probably would take it as the OP suggests .
Do check your pension allows regular drawdowns in the future after taking the TFLS.  I have a relative who had to move theirs to a more flexible SIPP first (both Aviva), as the original one didn’t 😳

PattiTelongo

I’m looking at starting drawdown in April but I certainly won’t be front running anything before the budget. I’ll assess again afterwards as that’s the sensible thing to do rather than take certain right leaning rags scaremongering as gospel. 

Albermarle

Steve182 said:

I've decided to withdraw all of mine, and do a bit of recycling, well below the allowable limit, to take full advantage of the £268K allowance in case it's reduced, which I fear it will be.

Doesn't take too long to use the money sensibly, pay off mortgage, ISAs, a bit of pension recycling, investment in growth shares (sell before £3K CGT limit reached) etc etc

Just wondering if any others here are doing or considering the same?

If you read through the forum, you will see that it is a regular topic of discussion recently, as it was before the last budget.
The normal advice is not to make financial decisions based on rumours and speculation.
Especially when the sources are mainly anti Govt media outlets, prone to sensationalism and scaremongering.

Cobbler_tone

If you have £268k tax free to take now in isolation it is pretty low risk to do so. Unless of course they increase the limit (now or in the future), which would be a tad ironic.

Grumpy_chap

Making decisions based on speculation is generally not advised in these forums.
The OP, though, seems to have thought things through rather thoroughly.
There is also an element of timescale - if an individual had always planned to take the TFLS at age 60 and that lands in the next couple of years, then taking the money now is only bringing forward by a small bit a plan that was in place in any case.

Remember, once taken the TFLS cannot be returned back to the pension:
https://forums.moneysavingexpert.com/discussion/comment/81670182

Marcon

Steve182 said:

I've decided to withdraw all of mine, and do a bit of recycling, well below the allowable limit, to take full advantage of the £268K allowance in case it's reduced, which I fear it will be.

Doesn't take too long to use the money sensibly, pay off mortgage, ISAs, a bit of pension recycling, investment in growth shares (sell before £3K CGT limit reached) etc etc

Just wondering if any others here are doing or considering the same?

Why? Would other people's actions influence a decision you've already made?

kinger101

Regardless of what happens in the budget, inflation is eroding the 268k every year.  So if you can pay off mortgage and shelter as best possible the remainder from tax, then it's a sensible option.

RogerPensionGuy

Cobbler_tone said:

If you have £268k tax free to take now in isolation it is pretty low risk to do so. Unless of course they increase the limit (now or in the future), which would be a tad ironic.

Although I'm guessing 268K will never be increased, if a person had wolfed out 268K and they kept some SIPP funds uncrystallised, should the 268K be increased, I'm guessing them funds will be available just like when the LTA went up previously.

I am currently removing more/my remaining TFLS PCLS up to that 268K and SIPP provider asked if I wanted to put all remaining funds in the drawdown pot/crystallised bucket and I explained the possibility of 268K going up and that could disadvantage me, they fully agreed probably better keeping an uncrystallised pot if possible, person just said it will look messy having two pots in the SIPP.

I am not really happy taking out my full TFLS PCLS now, but I just don't trust them.

One factor that finally tempted me to take this action is looking at the average UK pension pot at various ages and especially age 66(apparently 185K) any reduction of the 268K may not affect much % of people currently and historically we have seen that old LTA go up to 1.8M/450K TFLS and then down to 1M/250K TFLS, such a crazy history.

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  https://www.pensionbee.com/uk/pension-landscape