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Post Info TOPIC: Do I have to take all of my tax-free cash in one go?
Sam


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Do I have to take all of my tax-free cash in one go?
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I have been told I can take my tax-free cash in slices each year 

How does this work and what are the advantages?



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William Burrows


Billy

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This is a good question - you don't have to take all of your tax-free cash in one go.

Providing you have the right type of pension e.g. SIPP which has the flexibility, you can take part of your pension as tax free cash

I explain this as "Salami Slicing" - every you time you cut off a slice of pension you can take 25% TFC e.g. £10,000 will pay £25K TFC and £100K will pay £25K

In practical terms you end up with two types of pension; some untouched pension (i.e. full 25% option still available) and some in drawdown (no more TFC)

It sounds complicated but a good adviser (e.g. me) can explain the advantages and disadvantages.

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William Burrows


Billy

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I have written a web page on this and produced a PowerPoint presentation -  see Phased Tax-Free Cash



-- Edited by William Burrows on Monday 22nd of June 2020 10:39:25 AM

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