relating to possible 2nd pension drawdown, etc

stevechoo

Hi all, its just over a year since i posted on here last.. with some of the posters help it enabled me to get a better understanding so i could carry out a pension restructure and take my first drawdown.. i now have a crystallised (inactive in terms of payments goin in) pension with most of my funds in (this i intend not to withdraw from again until i retire, and a current active works pension…

i now earn 20 to 25k pa from full time employment which is my only income, over the next few years i will consider accessing the active pension for things like home improvements etc..

My questions are:-

1. a year ago i set up a new sipp pension to transfer into which is now the crystallised pension. Could i now do this again if and when i decide to do this on a 2nd occasion (on a smaller scale than previous).. eg, a new sipp pension, trf in 20k from active works pension, take the 5k tax free allowance, and then drawdown the remaining 15k (or part of), and/or trf the remaining taxable balance to my main already crystallised pension.. then close the newly opened pension.. can a new sipp pension be opened, utilised, and then closed in this fashion.
2. regards tax purposes, i paid the income tax at 40% on my first drawdown, then recovered the overpaid tax through my 24/25 self assessment. using the 20k example above would i be able drawdown the whole 15k taxable amount and then the tax due on that be recovered through my tax code (via my payslips) after the self assessment is made for the tax year that is taken?

Any help any of you can provide in relation to this please will be greatly appreciated..

thanks in advance

LHW99

In regard to 1) what's wrong with transferring into the existing SIPP?

stevechoo

As an already crystallized pension my intention was to only put 'taxable' funds into it as I want to find the best way to receive the tax free element of my current active work pension in the event of possibly taking it earlier than state pension age while still being employed by my current employer... Thanks

NoMore

https://forums.moneysavingexpert.com/discussion/comment/81911244#Comment_81911244

I've read this three times and still have no idea what you are trying to achieve and why you need a new pension to achieve it.

DRS1

Who is it with? Some places like HL allow you keep the crystallised bit and the uncrystallised bit separate. Others like ii chuck it all in one pot but have a percentage split showing how much is uncrystallised and how much is crystallised. Each of them will let you take a tax free lump sum from the uncrystallised part.

There are tales on her about it being easier to transfer pensions which have not been crystallised than ones which have. So doing your two stop thing might not be the easiest thing in reality.

ali_bear

You do know that a pension is supposed to pay for your retirement (not home improvements)?

stevechoo

i made the point in my original post that i intend to leave the already crystallised pension untouched until i reach state pension age. this along with state pension will give me an income close to what i have now working full time.

my post is basically me wondering the best way for me to access my current works pension (ie, 2nd pension) as it grows over the next 10 years to help me possibly do things like home improvements etc should i wish.

in the posts above it mentions the possibility that (if i'm reading them right), that it may be possible for me to transfer from my active fund to the crystallised pension and still draw down the 25% tax free from the newly transferred amount accordingly?? This i have no current understanding of at the moment, and would make things a lot easier for me if that was the case..

Thanks again

DRS1

You need to talk to whoever has your crystallised pension and ask them what would happen if you transferred £20k of your works pension to your pension with them and then wanted to take £5k as tax free cash.

We can tell you what is possible but only they can tell what will actually happen.

You also need to understand that if there is a gap between the transfer and you taking the tax free cash then figures could shift and you may not get £5k as tax free cash. Even if the £20k is completely segregated from what is there now (as in HL) the £20k could become £16k or £24k before you take the tax free cash. So then you may be limited to £4k or could go on up to £6k of tax free cash.

stevechoo

Thank you very much