short period draw down pensions?

[Cogcog]

I have tried the various draw down pension calculators but none seem to have a lower limit on the length of drawdown.

Does anyone know what the minimjum period may be?

The reason I ask is that it seems that if i put money from company into my personal pension pot while paying PAYE at 40%, I could get the tax relief on pension contributions at 40%. Then take 25% lump sum on retirement and collect the rest promptly in a draw down and pay only at 20%. PAYE after my personal allowance.

Or am I missing something?

[Stay in Bed Instead]

Cogcog said:

I have tried the various draw down pension calculators but none seem to have a lower limit on the length of drawdown.

Does anyone know what the minimjum period may be?

The reason I ask is that it seems that if i put money from company into my personal pension pot while paying PAYE at 40%, I could get the tax relief on pension contributions at 40%. Then take 25% lump sum on retirement and collect the rest promptly in a draw down and pay only at 20%. PAYE after my personal allowance.

Or am I missing something?

Basically that's it.

There is no minimum period to drawdown pension. If fact, you can have it all in one go if you wanted but it's not particularly tax efficient.

[Enut]

Assuming that the drawdown amount is within basic rate tax limits then that's fine, remembering that you will trigger the money purchase annual allowance so that you can then only put in £4,000 per annum into pensions once you have flexibly accessed their pension.

Pensions are extremely tax efficient savings vehicles for higher rate tax payers, at the moment at least.

[anonymous-user]

Cogcog said:

...collect the rest promptly in a draw down and pay only at 20% PAYE after my personal allowance.

Well yes, so long as the total pot is less than £66,700 and you have no other income.

25% tax free = £16,700
Remaining amount = £50,000 to draw as income.
£12,500 in tax free band, 20% tax on £37,500

Total tax = £7,500
Net amount received after tax = £59,200

But it sounds bonkers to do it, unless you've got a shed-load of very expensive debt to pay down or some other crisis.

[Mazinbrum]

Cogcog said:

I have tried the various draw down pension calculators but none seem to have a lower limit on the length of drawdown.

Does anyone know what the minimjum period may be?

The reason I ask is that it seems that if i put money from company into my personal pension pot while paying PAYE at 40%, I could get the tax relief on pension contributions at 40%. Then take 25% lump sum on retirement and collect the rest promptly in a draw down and pay only at 20%. PAYE after my personal allowance.

Or am I missing something?

Depends on the pot size and how much income you need and for how long. You can take £16667 tax free every year for as long as your pot lasts. If you need more than this you need a different strategy, there's no one size fits all.