TFLS withdrawal before Autumn budget

Steve182

Thanks all for your input.

My position with regard to tax free allowance is quite complex. I can currently take around 250K because I have protected tax free cash at around 41% in one pension and standard 25% in another. Combined, that equates to around £250K of tax free money available. I can boost that to £268K with some recycling (at <30%).

As far as I can see I have nothing to lose. If I do nothing now and it is lowered to say 100K in November I'll be gutted. I will be paying off mortgage and reinvesting 90% anyway in pensions and Isas.

If the limit is increased again to >£268K by next government, great, my new pension contributions after the withdrawal will qualify for 25% TFLS.

Steve182

Marcon said:

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?

I'm 90% sure I'm doing the right thing but need anyone who can tell me it's a huge mistake to pipe up. This is a huge decision for me. Thanks for contributing.

Steve182

cfw1994 said:

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 😳

Thanks for your input. After the TFLS withdrawal my pensions will be consolidated with II  who do allow that

Steve182

HedgehogRulez said:

Steve182 said:

Marcon said:

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?

I'm 90% sure I'm doing the right thing but need anyone who can tell me it's a huge mistake to pipe up. This is a huge decision for me. Thanks for contributing.

Sound like you have a lack of conviction in your plan. Stop seeking the approval of others. Weak.

No, there is a difference between seeking approval, which I am certainly not,  and looking for others to point out obvious flaws.....

Someone might reply.....leave it a couple of weeks, It's been reported that Reeves is due to make a statement to settle pre-budget speculation on pensions imminently.

Steve182

cfw1994 said:

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 😳

I agree that's where I think it may remain too, but if she drops it to 100K I'll be in tears......a statement from the treasury to diffuse speculation would be helpful

ukdw

Re a potential drop from £268k to £100k - one way of looking at is - if it does happen:

For many people with large pensions this would mean they would probably never access the additional £168k in their lifetimes - so an effective tax of 100%, but no immediate benefit to the government.

If they do want to access it, then assuming they are already making good use of their 20% tax bands, then the £168k could be drawn down over 4 years paying 40% tax and put into ISAs.

Or if it is was all drawn down in one year   - ~£50k would be taxed at 40%, £25,140 @ 60%, ~£93k @ 45% - so total tax of ~£77k - so an effective tax rate of about 45.7%

If the £168k is left in the pension and then inherited - then IHT of 40% likely to be payable, then marginal tax on top when it is eventually draw down.

Marcon

Steve182 said:

HedgehogRulez said:

Steve182 said:

Marcon said:

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?

I'm 90% sure I'm doing the right thing but need anyone who can tell me it's a huge mistake to pipe up. This is a huge decision for me. Thanks for contributing.

Sound like you have a lack of conviction in your plan. Stop seeking the approval of others. Weak.

No, there is a difference between seeking approval, which I am certainly not,  and looking for others to point out obvious flaws.....

Someone might reply.....leave it a couple of weeks, It's been reported that Reeves is due to make a statement to settle pre-budget speculation on pensions imminently.

How can people point out 'obvious flaws' when you've given next to no information about your position? Your original post didn't even mention that you had protected tax free cash. Taking what you describe as a 'huge decision' based on input from others who don't have the relevant knowledge about your situation probably isn't exactly a reliable way to proceed. 

Albermarle

Steve182 said:

HedgehogRulez said:

Steve182 said:

Marcon said:

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?

I'm 90% sure I'm doing the right thing but need anyone who can tell me it's a huge mistake to pipe up. This is a huge decision for me. Thanks for contributing.

Sound like you have a lack of conviction in your plan. Stop seeking the approval of others. Weak.

No, there is a difference between seeking approval, which I am certainly not,  and looking for others to point out obvious flaws.....

Someone might reply.....leave it a couple of weeks, It's been reported that Reeves is due to make a statement to settle pre-budget speculation on pensions imminently.

Out of interest where was that reported ?

In fact the speculation it will be reduced is also reported regularly, but based on zero actual facts, so this might well be the same.

jimjames

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.

I'm sure the government will appreciate you moving money from being tax free to potentially taxable. What are you planning to do with it once it's outside the pension?

RogerPensionGuy

Steve182 said:

HedgehogRulez said:

Steve182 said:

Marcon said:

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?

I'm 90% sure I'm doing the right thing but need anyone who can tell me it's a huge mistake to pipe up. This is a huge decision for me. Thanks for contributing.

Sound like you have a lack of conviction in your plan. Stop seeking the approval of others. Weak.

No, there is a difference between seeking approval, which I am certainly not,  and looking for others to point out obvious flaws.....

Someone might reply.....leave it a couple of weeks, It's been reported that Reeves is due to make a statement to settle pre-budget speculation on pensions imminently.

Reference statements before budgets can just cause more chaos. 

The only recent statement I remember is government people saying the tripple lock will be kept this government, maybe it will, maybe it won't, maybe it will be kept and adjusted, I have little confidence in any statements the day after they have been said. 

Reference the possibility of a statement on not reducing the 268K, if they released a statement on that, the media will they just speculate on all the other stuff that could be adjusted.

I'm personally ignoring the 268K media and making my own choices. 

I feel the media speculation about reducing NI and upping income tax certainly fits the narrative of protecting working people however that's defined is another matter, lots of media saying pensioners are dripping in gold and not contributing their fare share to society. So this ploy looks very convenient for the working people.