Should I attempt to drain my DC pension pot before reaching state pension age?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81988581#Comment_81988581

Chart that tells a story — pensions and earnings

ali_bear

https://forums.moneysavingexpert.com/discussion/comment/81988686#Comment_81988686

Paywall behind sadly is it

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81988701#Comment_81988701

I am not a subscriber and I was able to read it ( after googling it) . However if I click on my link, it is behind a paywall . Strange.

Anyway it is a very simple graph of state pension as a % of average earnings from 1970. As in my earlier post you can see this decline from 1980 at around 25% to 16% and then with the Triple Lock back up to 25% again.

hugheskevi

I don't know exactly where they found the chart, but hopefully they'll remember and share the source here.

It is a chart I make myself, based on the indices used in Triple Lock and updated each year.

michaels

https://forums.moneysavingexpert.com/discussion/comment/81985143#Comment_81985143

One thought, going into higher rate at all loses you half of the £1000 savings band that you are currently utilising which would see an immediate £200 extra tax even if you just go a penny over.

chuffinnora

@NickBFS

Earlier you said…

"Re tax-sheltering, other than adventurous investments (VCTs, etc...) and premium bonds, neither of which are especially attractive to me, this leaves primarily ISAs and I already max out on my ISA allowance every year and will continue to do so for a while as I gradually decant my existing tax-unsheltered savings and investments into ISAs so this will unfortunately not be an option for me, at least in the short to medium term."

Just another perspective on Premium Bonds, as I know they get a lot of bad press. We have max'd out our ISAs also for some years, so we placed a £100k into Premiums (between us). Appreciate its total chance on what you earn from it, but I did some analysis, and we have earned between 3.4-4.6% annually from them. As thats tax free, when we were 40% taxpayers, that is in reality 5.7-7.6% equivalent on standard taxable savings. Even now as 20% taxpayers thats like 4.2-5.7%.

Even if you disregard the tax equivalent element, we've not been far off (and better sometimes) than any cash ISA has earned us. That excludes SS ISAs which have earned considerably more with a balanced portfolio, and where I now focus our annual ISA allowances to.