have I missed something?

scoobyjones1

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, you can take it out in small amounts, every month or year...or whenever you want, so long as your pension provider offers this, flexi access drawdown. If not you can transfer your pension to a different provider quite easily.
I'm with Interactive Investor.
You could go into drawdown now, take just enough tax free cash each year, say £4k...plus £12k taxable (under the 20% threshold) ...total about £16k...tax free every year...and take the other £14k from your savings and investments (watch out for CGT on any investments).
The remainder of your, uncrystallised pension pot will (hopefully) still grow and that means your tax free cash will continue to go upwards, though there is a cap on this in your lifetime...about £268k tax free, I think.
Then when you do get your state pension you may have to move up into the 20% tax bracket...depending on how long your other savings etc last and how much you take from your pension.

I would recommend looking into this approach because you have so much in your pension, you need to get some out before you get clobbered for tax. If you take it out slowly and if your pension is well invested, it would only need to grow about 2.5% per year for it to keep going up...even though you are drawing £16k out each year!
Plus your other savings and investments will last longer.
You should be able to live tax free...until you get the state pension....by which time the thresholds should have increased.
This guy explains it well :
https://www.youtube.com/watch?v=1gTlVRVr8xQ&t=335s