A question about : Take SIPP pension now or next year
I' m sure that these questions have been answered elsewhere but I am just looking for a bit of confirmation or otherwise of the sense of my intended SIPP usage path.
I already have access to a DB pension which would enable me to begin flexible drawdown from my SIPP this tax year if I so wish. However, I understand that it would be more advantageous to utilise capped drawdown initially and then switch to flexible drawdown next tax year, if I ever wished, or had the opportunity to make further pension contributions up to Ј40k pa ( although this is currently a moot point since I have fixed protection 2014 in place and do not particularly wish to earn a pensionable salary again...but you never know what the future holds ).
I intend to take the maximum tax free lump sum from my SIPP and then an income drawdown of sufficient size to fully utilise my remaining 20% tax band each year. This would amount to
I do not need to crystallise the SIPP pot this year, but certainly intend to begin utilising it in 15-16 : firstly, to take the largest possible tax free lump sum before there is the chance of any potential legislation to limit it; and secondly, to actually use the damn thing when I can most enjoy it ( the inheritance pot bit is nice but more an incidental).
Anything in particular I have missed or should consider further in this complex game of chess ?
Thanks.
OTH
Best answers:
- I think that's fine and personally I'd start capped drawdown as soon as I possibly could, except I'm not able to.
Given the LTA potential I suggest using the maximum capped drawdown then maybe more once the 10k liit is no longer a factor, since this removes the money from LTA consideration. Maybe use the money for ISA contributions, or VCTs to reduce the income tax bill.
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