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Are you now drawing down against your pension to eat into the capital?
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Hilda Ogden
Posted: 14 February 2025 16:26:28(UTC)
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Busy doing nothing;334411 wrote:
Hilda Ogden - Well i have decided to take a wait and see approach regarding drawing down excess capital from my SIPP. Hopefully a change in Government will address these issues that we all have, don't want to do anything now i might regret later on.

Well Bdn, my own opinion is that IHT on pension pots is here to stay. I really cannot see the tax burden returning to sensible levels in my lifetime. I hope I'm wrong but I suspect not.
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Busy doing nothing on 14/02/2025(UTC), MBA MBA on 14/02/2025(UTC), Jay P on 14/02/2025(UTC), stephen_s on 14/02/2025(UTC)
D Bergman
Posted: 14 February 2025 16:56:35(UTC)
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I had increased contributions to our SIPPs on the assumption of IHT-free inheritance, so like others I have started to change my plans.
We have 2 SIPPs, valued at £600K & £350K, and have not yet taken any TFLS from them.

I will take the full 25% before April 5th, transfer to our son and take out an 7-year insurance policy written in trust for him to cover the possible IHT (we are 75 & 74 years old).
I will then take up to the maximum 20% income tax liability, with the limitation that this should not push any dividends from my GIA into higher dividend tax.
What we’ll do with the money I’m not yet certain, but I think grandchildren’s ISAs will benefit.

Also am planning a very expensive trip to SE Asia, and Business Class with SIA LON - SIN @ about £7K pp return would swallow up some of the cash, & the spouse has mentioned that Raffles Hotel has very nice suites.

But seriously, I think it makes more sense to use up as much of the SIPPs as possible, use profits/income from ISAs to top up what we need and leave the GIA to the next generation.

And I’m increasing our charitable giving to ensure any higher-rate taxable income is used up.
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MBA MBA on 14/02/2025(UTC), Jay P on 14/02/2025(UTC), john brace on 14/02/2025(UTC), stephen_s on 14/02/2025(UTC), D T on 21/02/2025(UTC)
New Simon T
Posted: 14 February 2025 17:09:02(UTC)
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I have taken 155k plus 178k TFLS from my SIPP pension in the past five years, I am only 18k down from my starting position of post TFLS
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MBA MBA on 14/02/2025(UTC), john brace on 14/02/2025(UTC), Guest on 14/02/2025(UTC)
John Bleke
Posted: 14 February 2025 17:30:31(UTC)
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Me and the missus will be withdrawing up to the higher rate threshhold and giving it to our kids. The problem is my wife will have 1.5m if she intends to keep in her job for another 6 years. That means there's a problem in that it could grow faster than she can withdraw it and remain a basic rate taxpayer.

Portugal was an option under the golden visa scheme where you stayed 10 years and could draw it all down tax free so it looks like I'll be on the search for another retirement country with lax pension tax laws!
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Robert D
Posted: 14 February 2025 17:35:43(UTC)
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D Bergman;334417 wrote:
I had increased contributions to our SIPPs on the assumption of IHT-free inheritance, so like others I have started to change my plans.
We have 2 SIPPs, valued at £600K & £350K, and have not yet taken any TFLS from them.

I will take the full 25% before April 5th, transfer to our son and take out an 7-year insurance policy written in trust for him to cover the possible IHT (we are 75 & 74 years old).
I will then take up to the maximum 20% income tax liability, with the limitation that this should not push any dividends from my GIA into higher dividend tax.
What we’ll do with the money I’m not yet certain, but I think grandchildren’s ISAs will benefit.

Also am planning a very expensive trip to SE Asia, and Business Class with SIA LON - SIN @ about £7K pp return would swallow up some of the cash, & the spouse has mentioned that Raffles Hotel has very nice suites.

But seriously, I think it makes more sense to use up as much of the SIPPs as possible, use profits/income from ISAs to top up what we need and leave the GIA to the next generation.

And I’m increasing our charitable giving to ensure any higher-rate taxable income is used up.



These are all excellent outcomes with benefits for individuals, families, the economy, and wider society. SIPPs are going back to the true purpose, which is a pension savings vehicle, not a means of avoiding a fair tax. Osborne was wrong to introduce the loophole and Reeves is correct to abolish it.

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D Bergman on 14/02/2025(UTC), beemaboy on 17/02/2025(UTC), AndyJ on 17/02/2025(UTC)
Raj K
Posted: 14 February 2025 17:38:19(UTC)
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My plan is to eventully leave the country for sunshine and less stress and the ability to give my money to whomever i want. They tax you as you earn, they tax you when you use your brains to invest, they then want to tax you when you die...i mean wtf kind of nonsense is that. They dont want families to build wealth for themselves and instead be dependent like dogs on the state, so can be controlled. In that case
they should tax King Charlie when he dies , why is he allowed to pass his personal crap to his next in line. Oh but Queen made a nice arrangement with John Major to protect herself whilst everyone else is expected to tow a different line (historians please correct me if i am wrong)..... We are seriously taken for a ride in this country, whilst those that abuse their bodies get hand outs till death.

On the subject of IHT protection i will be taking out a 30 year term life insurance policy to pay for that, at least that will take some of the pressure of whilst trying to work out where to go and the time it will take to plan.
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6 users thanked Raj K for this post.
Rob B on 14/02/2025(UTC), Guest on 14/02/2025(UTC), stephen_s on 14/02/2025(UTC), Dexi on 15/02/2025(UTC), Johan De Silva on 16/02/2025(UTC), Barista on 17/02/2025(UTC)
MBA MBA
Posted: 14 February 2025 19:23:27(UTC)
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I just learnt today a colleague who was going to retire in five years is going to retire in April because of the imposition of IiHT on pensions. He wants to start withdrawing the money down at £50k pa. He’s one of these people who is the only person in the organisation who can do his job. Replacing him will be hard.

I wonder how many doctors and senior public sector professionals will call it a day sooner.

Let’s not even think about highly successful entrepreneurs. Oh well we can all live off the state
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Jay P on 14/02/2025(UTC), john brace on 14/02/2025(UTC), Guest on 14/02/2025(UTC), stephen_s on 14/02/2025(UTC), Barista on 17/02/2025(UTC)
MBA MBA
Posted: 14 February 2025 19:24:22(UTC)
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Jay P;334399 wrote:
No. Not yet anyway.

Our SIPP in drawdown (£1.202k) does indeed provide our income from its natural yield so capital has remained untouched. In fact, it is increasing both through growth and re-investment of excess income.
This taxed income (inc. SP etc) has been held at the £50270 point, so this year iro 2.9% withdrawal rate from SIPP.
(TFLS was withdrawn before retirement).

Our ISAs (£850k) have provided lumpy, discretionary spends.

That's all still ok for now, pending further stupidity from this awful government.
She'll raid the ISA tax free status, won't she? Or limit it to UK companies.
Or some other entirely vindictive, cretinous, self-defeating bit of nonsense.

Future options include drawing down the SIPP capital and getting the ISA capital out of the Country - although the evil genius from Resolution Foundation (and our next Chancellor) has talked of export controls in the past of course, and I heard one Labour 'commentator' raise it again last week.
Nothing like scaring away present and future capital to appease the Comrade R and Zach's of this benighted Isle, is here? A price worth paying I'm sure..


I doubt they’ll ever be able to introduce capital controls. The Uk relies so heavily on foreign capital
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MBA MBA
Posted: 14 February 2025 19:46:19(UTC)
#14

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Busy doing nothing;334411 wrote:
Hilda Ogden - Well i have decided to take a wait and see approach regarding drawing down excess capital from my SIPP. Hopefully a change in Government (4+ years and counting) will address these issues that we all have, don't want to do anything now i might regret later on.


I really don’t think this policy is going to be reversed. It will soon start to draw jn some decent revenue directly and indirectly ie folks withdrawing from their pension at the 20% rate and Britain has to find a way to fund its gigantic welfare state and open borders policy. 70m peoole and 53% of all households as net fiscal receipents
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Jay P on 14/02/2025(UTC), Busy doing nothing on 14/02/2025(UTC), stephen_s on 14/02/2025(UTC), Barista on 17/02/2025(UTC)
Newbie
Posted: 14 February 2025 20:13:55(UTC)
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MBA MBA;334439 wrote:
Jay P;334399 wrote:
No. Not yet anyway.

Our SIPP in drawdown (£1.202k) does indeed provide our income from its natural yield so capital has remained untouched. In fact, it is increasing both through growth and re-investment of excess income.
This taxed income (inc. SP etc) has been held at the £50270 point, so this year iro 2.9% withdrawal rate from SIPP.
(TFLS was withdrawn before retirement).

Our ISAs (£850k) have provided lumpy, discretionary spends.

That's all still ok for now, pending further stupidity from this awful government.
She'll raid the ISA tax free status, won't she? Or limit it to UK companies.
Or some other entirely vindictive, cretinous, self-defeating bit of nonsense.

Future options include drawing down the SIPP capital and getting the ISA capital out of the Country - although the evil genius from Resolution Foundation (and our next Chancellor) has talked of export controls in the past of course, and I heard one Labour 'commentator' raise it again last week.
Nothing like scaring away present and future capital to appease the Comrade R and Zach's of this benighted Isle, is here? A price worth paying I'm sure..


I doubt they’ll ever be able to introduce capital controls. The Uk relies so heavily on foreign capital

It is not so much the capital controls - rather transferring ones SIPP into an overseas QROPS.
I had always had this in the back of my mind but it seems that this may be have a lot of caveats and hurdles now.
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1 user thanked Newbie for this post.
Guest on 14/02/2025(UTC)
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