Moving into SIPP drawdown
Discussion
I've recently retired and am just over 55 so can start accessing my Hargreaves and Lansdown SIPP.
In normal times I would have just taken the full 25% put it into ISA's now, and again in April, with the remaining funds stuck in my offset mortgage account.
With the possibility of a wealth tax in the next budget I doun't want to risk having the full 25% of my retirement money sitting in easliy accessed savings accounts. Are there any disadvantages to only taking enough of the 25% to use this years ISA allowance, then the remaining after the budget?
As my SIPP is with H&L it mKes sense to move it into drawdown with them, however they are one of the more expensive platforms so once in drawdown are you locked in with that provider in any way or can it be shifted to another at any time?
In normal times I would have just taken the full 25% put it into ISA's now, and again in April, with the remaining funds stuck in my offset mortgage account.
With the possibility of a wealth tax in the next budget I doun't want to risk having the full 25% of my retirement money sitting in easliy accessed savings accounts. Are there any disadvantages to only taking enough of the 25% to use this years ISA allowance, then the remaining after the budget?
As my SIPP is with H&L it mKes sense to move it into drawdown with them, however they are one of the more expensive platforms so once in drawdown are you locked in with that provider in any way or can it be shifted to another at any time?
Is there a particular reason why you want to crystallise your entire pot in one go? Do you actually need the funds or are you just trying to get the tax free cash out in case the rules change?
If you are moving money into tyour offset mortgage account won't you be missing out on the gains made by leaving the funds invested?
There are providers who don't charge for dradown but I won't mention who they are in case some smart arse makes a comment.
If you are moving money into tyour offset mortgage account won't you be missing out on the gains made by leaving the funds invested?
There are providers who don't charge for dradown but I won't mention who they are in case some smart arse makes a comment.
Mr Pointy said:
Is there a particular reason why you want to crystallise your entire pot in one go? Do you actually need the funds or are you just trying to get the tax free cash out in case the rules change?
If you are moving money into tyour offset mortgage account won't you be missing out on the gains made by leaving the funds invested?
There are providers who don't charge for dradown but I won't mention who they are in case some smart arse makes a comment.
Yes the reason for wanting to take the full 25% is to lock that benefit in. If I leave the money in the pension it's likely to hit the LTA in the next few years (assuming similar growth).If you are moving money into tyour offset mortgage account won't you be missing out on the gains made by leaving the funds invested?
There are providers who don't charge for dradown but I won't mention who they are in case some smart arse makes a comment.
I agree the offset isn't a great investment, however it is sensible and low risk.
btdk5 said:
Your betting on legislation that doesn’t even exist. They could just as easily step the 25% allowance down to x%
They could, but I can't see them making a big change in one hit, or applying it to people who have already reached 55 and have retired. It's not even been suggested, however wealth taxes have. It has always been my plan to take the 25% at 55.
I spoke to HL about this (concern about 25% tax free lump sum being reduced in the budget) and they said that it would be possible to take the 25% lump sum, put it in my HL Fund and Share Account then cancel the transaction post budget (subject to no negative news) and put it back in the SIPP as before. Anyone else looked at this ?
98elise said:
Yes the reason for wanting to take the full 25% is to lock that benefit in. If I leave the money in the pension it's likely to hit the LTA in the next few years (assuming similar growth).
I agree the offset isn't a great investment, however it is sensible and low risk.
I thought the LTA was for contributions not growth.I agree the offset isn't a great investment, however it is sensible and low risk.
alistair1234 said:
98elise said:
Yes the reason for wanting to take the full 25% is to lock that benefit in. If I leave the money in the pension it's likely to hit the LTA in the next few years (assuming similar growth).
I agree the offset isn't a great investment, however it is sensible and low risk.
I thought the LTA was for contributions not growth.I agree the offset isn't a great investment, however it is sensible and low risk.
Redchaz said:
I spoke to HL about this (concern about 25% tax free lump sum being reduced in the budget) and they said that it would be possible to take the 25% lump sum, put it in my HL Fund and Share Account then cancel the transaction post budget (subject to no negative news) and put it back in the SIPP as before. Anyone else looked at this ?
That's interesting! Is that outside of an ISA?98elise said:
I've recently retired and am just over 55 so can start accessing my Hargreaves and Lansdown SIPP.
In normal times I would have just taken the full 25% put it into ISA's now, and again in April, with the remaining funds stuck in my offset mortgage account.
With the possibility of a wealth tax in the next budget I doun't want to risk having the full 25% of my retirement money sitting in easliy accessed savings accounts. Are there any disadvantages to only taking enough of the 25% to use this years ISA allowance, then the remaining after the budget?
As my SIPP is with H&L it mKes sense to move it into drawdown with them, however they are one of the more expensive platforms so once in drawdown are you locked in with that provider in any way or can it be shifted to another at any time?
If I were you I'd consider transferring a chunk out to a DIY platform such as ii. You can use multiple providers for drawdown. In normal times I would have just taken the full 25% put it into ISA's now, and again in April, with the remaining funds stuck in my offset mortgage account.
With the possibility of a wealth tax in the next budget I doun't want to risk having the full 25% of my retirement money sitting in easliy accessed savings accounts. Are there any disadvantages to only taking enough of the 25% to use this years ISA allowance, then the remaining after the budget?
As my SIPP is with H&L it mKes sense to move it into drawdown with them, however they are one of the more expensive platforms so once in drawdown are you locked in with that provider in any way or can it be shifted to another at any time?
Note that although the annual allowance and higher rate relief are more natural targets for the Chancellor, we are in uncertain times and the 25% TFC is an anomaly. Something to be said for take it while you can.
Ntv said:
98elise said:
I've recently retired and am just over 55 so can start accessing my Hargreaves and Lansdown SIPP.
In normal times I would have just taken the full 25% put it into ISA's now, and again in April, with the remaining funds stuck in my offset mortgage account.
With the possibility of a wealth tax in the next budget I doun't want to risk having the full 25% of my retirement money sitting in easliy accessed savings accounts. Are there any disadvantages to only taking enough of the 25% to use this years ISA allowance, then the remaining after the budget?
As my SIPP is with H&L it mKes sense to move it into drawdown with them, however they are one of the more expensive platforms so once in drawdown are you locked in with that provider in any way or can it be shifted to another at any time?
If I were you I'd consider transferring a chunk out to a DIY platform such as ii. You can use multiple providers for drawdown. In normal times I would have just taken the full 25% put it into ISA's now, and again in April, with the remaining funds stuck in my offset mortgage account.
With the possibility of a wealth tax in the next budget I doun't want to risk having the full 25% of my retirement money sitting in easliy accessed savings accounts. Are there any disadvantages to only taking enough of the 25% to use this years ISA allowance, then the remaining after the budget?
As my SIPP is with H&L it mKes sense to move it into drawdown with them, however they are one of the more expensive platforms so once in drawdown are you locked in with that provider in any way or can it be shifted to another at any time?
Note that although the annual allowance and higher rate relief are more natural targets for the Chancellor, we are in uncertain times and the 25% TFC is an anomaly. Something to be said for take it while you can.
Gone are the times when a budget would mean a few pence on beer and petrol!
98elise said:
That's interesting! Is that outside of an ISA?
It's in a SIPP, so the potential plan is to take the 25% tax free from the SIPP pre Budget, put it into my Fund and Share Account then either cancel that transaction and put it back into the SIPP if no negative Budget action, or keep in the Fund and Share Account and decide from there. BUT I am not an expert !!Redchaz said:
98elise said:
That's interesting! Is that outside of an ISA?
It's in a SIPP, so the potential plan is to take the 25% tax free from the SIPP pre Budget, put it into my Fund and Share Account then either cancel that transaction and put it back into the SIPP if no negative Budget action, or keep in the Fund and Share Account and decide from there. BUT I am not an expert !!arguti said:
JulianPH said:
Please be aware that you can only move this money back into you pension if you have equal net relevant earnings and enough carry forward to do so.
What HL has told you is quite misleading.
It did rather sound too good to be true - very misleading What HL has told you is quite misleading.
JulianPH said:
Please be aware that you can only move this money back into you pension if you have equal net relevant earnings and enough carry forward to do so.
What HL has told you is quite misleading.
Thanks for this Julian, so, to be clear I cannot instruct HL 2 days pre budget to take 25% of my SIPP tax free and put it in my Fund and Share account, then cancel that transaction a day post budget and reverse the process ?
What HL has told you is quite misleading.
Thanks for this Julian, so, to be clear I cannot instruct HL 2 days pre budget to take 25% of my SIPP tax free and put it in my Fund and Share account, then cancel that transaction a day post budget and reverse the process ?
Redchaz said:
JulianPH said:
Please be aware that you can only move this money back into you pension if you have equal net relevant earnings and enough carry forward to do so.
What HL has told you is quite misleading.
Thanks for this Julian, so, to be clear I cannot instruct HL 2 days pre budget to take 25% of my SIPP tax free and put it in my Fund and Share account, then cancel that transaction a day post budget and reverse the process?What HL has told you is quite misleading.
It does sound a bit odd.
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