one on behalf of the missus (no)..
if has a mixture of cash / s+s isa / Pension SIPP - Hoping to retire in couple months , age 58 , what is best to access first ?
Before recent announcement on IHT and dying after 75.. Advice was always keep the pension as long as possible as it sits outside IHT and a canny way of passing on your fiscally savvy investing and looking after yours' and family well being. That is now out of the window. Depends on what your thoughts are on "passing" on funds after you're gone, if you're not bothered about that and any potential taxation issues down the line, a mix of all of the above and maxxing as much as you can using the 75% crystalised part of pensions to hit your self allowance (12k ish) then adding 25% from your tax free element from Pension. Then topping up whatever you need from ISA/cash.
Yeah, the tax free quandary is an interesting one. Makes sense to use it over time for tax efficiency in one regard, but at the same time there is no guarantee that it will remain tax free forever, so there's another argument that says whip it all out at once to keep HMRC's hands off it.
The poster a few posts above makes an important point too, about having a couple of years' drawdowns in cash equivalents, so you're never in a position of having to sell equities in the immediate aftermath of a crash.
Dilemmas back and forwards with taking the full 25% lump sum, as that means anything you take from it after that is taxable (ie remaining 75%), but still have the personal tax allowance of 12k. I had moved away from taking lumpers, but given the recent announcements on IHT and new DC rules, I'm thinking of taking it. Getting a hit at 20%, on anything over 12k, doing some gifting and enjoying life. Oh aye, property in trust.
The future tax treatment of pensions is an excellent point. Who knows what a future Chancellor may decide to do.
Hopefully reverse this recent calamity of a decision, and raising the level of IHT threshold a lot more. It hasn't changed since 2009, under inflation alone it would now be set at £517k.
I've three company pensions. The first one is final salary and the previous and current ones are defined contribution.
I am planning on moving the last one over to the current scheme with Aviva, just to keep them together to be easier to manage.
The original one i'll leave as is. But, is there any scenario or case where I should transfer this final salary scheme over to a defined contribution pot? My dislike of the final salary is that the inflation cap on it is low so in real terms it's lost a fair bit of value in the last 5 years or so. That would be built into any transfer value though I assume. Also, assuming they remain separate am I better taking all of the combined tax free value out of the defined contribution pot.
I know I should probably go and speak to an IFA, but the SMB can likely give me good advice for free
Nope, in most cases IFA and Estate planners would advise keeping the DB - for one, it will sit outside IHT and is guaranteed, the company take the risk on the markets and is backed by PPF. I have been looking at exactly this for last few weeks with IFA. However, absolutely your situation could be one of those where they advise it makes sense (not knowing size of pots, whether you plan to take annuities/draw down/UFPLS etc.)
I did amalgamate a couple of DC funds and transferred to new Pension provider and management, did the same for Mrs. They have both gone up extremely nicely. Very happy I did it.
Absolutely take combined tax free values, my dilemma is whether to take the full 25%, get it banked, reinvested into SIPPS (limited amount) and ISA's, possibly gift some to kids and take a small hit on the remaining 75% taxable part after personal allowance. But I have my own selfish reasons for considering this.
