[Finance] Private pension withdrawal

[Weststander]

nobody has mentioned that you can put the money into a drawdown fund. you have 2 choices here. you can choose to say take 5k a year. First 25% tax free, rest taxable (note the word taxable not taxed). This has the advantage that as the tax free band is usually raised each year you may pay less tax or none dependent on other income . i have two company pensions which JUST keep me under the current £12500 band so if i start drawing from my personal pension i know this will be taxed but in a few years time it may not.

I’ve mentioned Income Drawdown several times in this thread.

Depending on the type of pension plan, you don’t need to “put” the plan funds anywhere. You just draw from it (units are sold) over and above the 25% tax free lump sum.

Underlying investments and the plan remain the same, albeit with less invested.

 

[Deleted member 2719]

I don’t think anyone should make decisions on their pension basis taking a view on the stock market. Most market professionals don’t know where it’s going let alone the average man in the street.

I know what you're saying, I just don't like wasting money.
But would have thought some parallel could be drawn from the Crimea take over in 2014

 

[Bodian]

I’m waiting to see whether my IFA was right or not, when all this Ukraine business started they advised to move my fund from various investments on the Aviva Platform into a cash account - all done last week, much lower potential growth but no danger of a loss.

No charges for doing this but there will be when it’s moved back into managed funds.

Lucky you. After two years of humming and hawing, we finally decided towards the end of last year to convert our cash ISAs to stocks and shares ISAs with the help of a friendly adviser. All went through early January.

20% drop so far! Plus all the fees and IFA costs.

Not one of our better decisions, but hopefully over 3-5 years it will work out.....

 

[PILTDOWN MAN]

Just had a look at one of my old pension pots. I can take it next year, which I might and leave my big pension for later on.

I have about £55000 in it until today now 51200

 

[Daddies_Sauce]

tax free band is usually raised each year
the current £12500 band

Current personal tax allowance is £12,570, our PM in waiting (dishy Rishi) has frozen the personal tax allowance until 5th April 2026 so currently no increase for a while.

Interesting strategy from IFA's some move funds back into cash and then wait and see, others ride out the storm, how low will the markets go? (slight bounce so far this morning) who is right?

 

[dazzer6666]

****ing hell. My long years of grunty toil seem to have paid dividends then, given that my tax free lump sum is over £200K

The pension was paid off a couple of years ago. I have been told I should retire, so I can stop NI payments, then go back part time. Sounds like a lot of faff, and I am far too busy (etc). But I'm 63 and could croak any minute, halving Mrs T's 'expectation'.

Should I pay someone to 'sort me aaht' I wonder?

It would be worth you at least getting some advice so you are clear on all your options - it’s incredibly complex (for example if your tax free sum is already over 200k, you could be close to the lifetime allowance which potentially causes even more tax issues at some point). Most IFAs will give you a free hour’s consultation which will at least outline some choices and implications (for example, putting your fund into a SIPP would mean it would go entirely to Mrs HWT if you croaked)

 

[dazzer6666]

Current personal tax allowance is £12,570, our PM in waiting (dishy Rishi) has frozen the personal tax allowance until 5th April 2026 so currently no increase for a while.

Interesting strategy from IFA's some move funds back into cash and then wait and see, others ride out the storm, how low will the markets go? (slight bounce so far this morning) who is right?

They’ll recover at some point (they always do…..), but as always action depends hugely on personal circumstances and individual risk tolerance. Coming out of the market may prove to have been a good decision, particularly for someone who needs to access their pension in the relatively near future, but equally it could mean missing out on a lot of growth

My SIPP is about 10% down since mid-November (including yesterday) but still around 15% up over 3 years.

 

[Napper]

sort of deviating the topic slightly but what would you class as an acceptable retirement pot if combined with state. 100k ? 200? or more

I assume North of 150k then gives decent options

 

[dazzer6666]

sort of deviating the topic slightly but what would you class as an acceptable retirement pot if combined with state. 100k ? 200? or more

I assume North of 150k then gives decent options

Loads of pension calculators on line where you can put in income, expected income etc etc ……..couple of examples

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/pension-calculator

https://try.guiide.co.uk/simple/?gc...jq4CYvJUsjXj0RouVSILSqXjRdsGSOFsaAgLIEALw_wcB

 

[dazzer6666]

I’m waiting to see whether my IFA was right or not, when all this Ukraine business started they advised to move my fund from various investments on the Aviva Platform into a cash account - all done last week, much lower potential growth but no danger of a loss.

No charges for doing this but there will be when it’s moved back into managed funds.

One view :

Aaron Anderson at Fisher Investments says markets will begin to settle down as the outcome of the conflict becomes clearer.

Russia’s invasion of Ukraine escalated tensions that have been simmering for months. However, history shows market volatility often occurs as uncertainty over a conflict grows, but as the outcome becomes clearer, markets typically rally.

When outright conflict results, equities typically rise overall in the period following—not because markets like war—but because markets can better examine the actual conflict’s potential scope and fallout and move on from the fear of the unknown.

Sanctions from the US, UK, and EU – including Germany putting the Nord Stream 2 pipeline on hold – will contribute to continued tight energy supplies in Europe. But markets had months to prepare for this (and other potential disruptions). Higher energy prices should eventually encourage increased supplies from non-Russian sources.

The heightened conflict in Ukraine, unfortunately, carries an immense and tragic human toll for those directly affected, but market history overwhelmingly shows regional conflicts are highly unlikely to cause a global economic recession or bear market.

 

[East Staffs Gull]

sort of deviating the topic slightly but what would you class as an acceptable retirement pot if combined with state. 100k ? 200? or more

I assume North of 150k then gives decent options

Definitely north of £500k and probably closer to £1 million. Unfortunately I’m not joking. It could need to last you for 30 years or more.

 

[dazzer6666]

Definitely north of £500k and probably closer to £1 million. Unfortunately I’m not joking. It could need to last you for 30 years or more.

You can’t know that without knowing the poster’s outgoings/plans/other savings/income/commitments etc etc………

 

[Shropshire Seagull]

Also a bit tangential, but any unused SIPP fund can be bequeathed tax-free.
So if you have a large pot and you don't live long enough to spend it all your beneficiaries can benefit unlike an annuity that dies with you.

People will have different views but paying for a pension review with a tax / pension expert can be money well spent as the advice can potentially save you a lot more than it costs you.

 

[Pondicherry]

Also a bit tangential, but any unused SIPP fund can be bequeathed tax-free.
So if you have a large pot and you don't live long enough to spend it all your beneficiaries can benefit unlike an annuity that dies with you.

People will have different views but paying for a pension review with a tax / pension expert can be money well spent as the advice can potentially save you a lot more than it costs you.

Only if you die under 75 I believe.

 

[dazzer6666]

SIPP position on taxation: