have I missed something?

DRS1

help_please_2013 said:

ian16527 said:

Why dont you start drawing down from your pension to your tax allowance level plus 25% tax free so as not to lose the tax free income and top up with your savings to maintain your income level? 

i assumed you had to take your entire tax free lump sum before you started drawdown

Read up on UFPLS.  It is a good way to stretch out the tax free lump sum (allowing it to benefit from investment growth).  UFPLS is the name for what @ian16527 is talking about.

DRS1

help_please_2013 said:

ali_bear said:

Agree with the above. You need to make the most of your tax-free allowance every year so this will mean taking some taxable pension income. Then the general advice would be to use your savings and investments to supplement this income, leaving the bulk of your pensions until later. 

Have you checked your state pension forecast? 

You may have to do some modelling to check if you really will end up paying some 40% tax later. If so then increase the level of taxable pension income before the state pension kicks in. 

I am definitely goin to be in the 40% tax bracket 

The 40% bracket starts just over £50k pa.  If you get say £12k state pension you'd have to be drawing over £38k pa from your pension (as taxable income) to get into 40% tax.  That is well over 5% of your fund each year  - I think people would say that is on the high side (too high probably).

As others have asked - do you have other taxable income?

If you are not going to be getting into 40% tax then drawing out now at 20% becomes less attractive.  But you should still make use of your personal allowance (and think about the nil rate bands for savings interest) and consider drawing enough to fill your ISA each year.

tacpot12

help_please_2013 said:

ian16527 said:

Why dont you start drawing down from your pension to your tax allowance level plus 25% tax free so as not to lose the tax free income and top up with your savings to maintain your income level? 

i assumed you had to take your entire tax free lump sum before you started drawdown

No, have a look at Uncrystallised Funds Pension Lump Sum or UFPLS for short.

Alexland

help_please_2013 said:

I am definitely goin to be in the 40% tax bracket 

Is the income of £30k in addition to the pensions - and will it continue to and beyond SP age?

If not assuming you take the 25% tax free that reduces your pensions to £525k which from age 55 would buy a lifetime annuity of just over 4.2% (around £22k pa) or drawdown at 1/35ths because of the early retirement age around £15k pa so plenty of headroom for SP before getting into higher rate at £50k pa unless the freeze on increasing tax bands to reflect inflation goes on for another decade or two.

ali_bear

I think the OP has an income of around 30k that will continue in retirement. 

He needs to do some careful planning around the taxation of his pension income. Perhaps though the best advice would come from a professional, IFA or similar, since he could probably benefit from some investment advice in addition to that relating to pensions. 

SVaz

As an alternative to UFPLS, which often can’t be taken monthly,  simply crystallise £16750 per year,  take the £4187 tfls then draw £1046 monthly. 

NoMore

ali_bear said:

I think the OP has an income of around 30k that will continue in retirement. 

He needs to do some careful planning around the taxation of his pension income. Perhaps though the best advice would come from a professional, IFA or similar, since he could probably benefit from some investment advice in addition to that relating to pensions. 

They say it comes from savings and investments, I’m not entirely sure it is income. This would change their tax position significantly 

ian16527

DRS1 said:

help_please_2013 said:

ian16527 said:

Why dont you start drawing down from your pension to your tax allowance level plus 25% tax free so as not to lose the tax free income and top up with your savings to maintain your income level? 

i assumed you had to take your entire tax free lump sum before you started drawdown

Read up on UFPLS.  It is a good way to stretch out the tax free lump sum (allowing it to benefit from investment growth).  UFPLS is the name for what @ian16527 is talking about.

Well not really, but you could do that way but more admin I suppose, although I use Vanguard and they dont do a monthly UFPLS as far as I know. I move what I need from my pre retirement account to drawdown account each February. Vanguard then pay me the TFLS for this amount then I drawdown the rest as a monthly amount.
 

ian16527

SVaz said:

As an alternative to UFPLS, which often can’t be taken monthly,  simply crystallise £16750 per year,  take the £4187 tfls then draw £1046 monthly. 

This is what I meant ^^^^

Smudgeismydog

help_please_2013 said:

NoMore said:

Where is the income of 30k coming from ? Is that separate to your dc pension drawdown ? 

the 30K is from savings and investments 

I'm not in drawdown 

Please clarify the £30k you originally referred to as ‘income’.

If this is interest/dividends/capital then it wouldn’t count as taxable income.