Quick Drawdown Question

[anonymous-user]

I have not accessed any of my private pension pot as yet but want to start drawdown before the tax year ends to use up my personal allowance (I’m not working any more) for 21/22.

Can I take £12500 as a taxable drawdown now without taking my 25% tax free amount?

The aim is to move everything into a drawdown (crystallised) account and just take £12500 pa, let the pot grow and then take the 25% at a later date.

If I do this, is the 25% still of the original pot size or the size it stands after a number of annual drawdowns have been made?

Thanks!

[Carbon Sasquatch]

You may well have already missed the boat. I've only tried it with one scheme & they had fixed payment dates and a lead time.....

It would be somewhat scheme specific on how they let you make withdrawals, but expect you'd need to at least crystallise c£16k, take 4k tax free & the other 12k as taxable income.

[Carbon Sasquatch]

Do you already have 12.5k in cash within the SIPP ?

If not and have to sell something first, then you've definitely left it too late

[anonymous-user]

Thanks.

So it’s either the 25% lump sum tax free and everything else taxable OR the first 25% of every withdrawal that’s tax free and no tax free lump sum.

[anonymous-user]

Carbon Sasquatch said:

Do you already have 12.5k in cash within the SIPP ?

If not and have to sell something first, then you've definitely left it too late

Yeah - I’ll need to start this next tax year.

[Carbon Sasquatch]

UFPLS is the bit at a time & FAD (Flexi Access Drawdown) is the 25% lump up front.

Whether you can mix them within the same pension, I'm not sure, but even if you can, not every provider will offer it.

Very much a question for your SIPP provider given the very short timeframe - ie all done by close of play Tuesday.

[anonymous-user]

Thanks all. I’ll be making calls Monday morning to see where I am.

It may actually be financially prudent to delay this, will look at the whole situation over the weekend.

[PistonHead007]

No chance this year I expect as taxed payments tend to go through a monthly payroll and that's normally near the end of the month.

With drawdown you have to take the 25% of the amount you're crystallising at the time or lose the ability to get the tax free portion.

[anonymous-user]

PistonHead007 said:

No chance this year I expect as taxed payments tend to go through a monthly payroll and that's normally near the end of the month.

With drawdown you have to take the 25% of the amount you're crystallising at the time or lose the ability to get the tax free portion.

Understood, thanks.