Pension recycling?
Posted: April 11th, 2018, 8:21 am
I 'retired' at the end of March and was 60 last week. I'd been paying 20% into my company's pension scheme (defined contribution - 'pension A'). In March 2017 I paid in an extra £20,000 (my cash ISA) into this pension in anticipation of retiring early.
This March I paid in an extra £10,000 to an older DC pension (pension B) and on 6 April I arranged to take the tax free lump sum and to draw a monthly sum to take me to 65 when a much older DB pension kicks in. I also put £2,880 into a new SIPP for 2017-18, with the intention of adding £2,880 a year for the next four or five years. These two payments were from my current account, but I have other savings (S&S ISA and premium bonds) that could cover it.
I have just received the TFLS from pension B (£14,000) and am about to do the paperwork for pension A (TFLS of £30,000-ish and smaller monthly drawdown). Drawdown from pensions A and B combined will equal my annual personal allowance (and there should be a fair bit of pension A left at 65).
I haven't yet made the £2,880 payment into my new SIPP for 2018-19, and when talking to a friend yesterday she said that this was pension recycling so now I'm worried ... is it?!?
This March I paid in an extra £10,000 to an older DC pension (pension B) and on 6 April I arranged to take the tax free lump sum and to draw a monthly sum to take me to 65 when a much older DB pension kicks in. I also put £2,880 into a new SIPP for 2017-18, with the intention of adding £2,880 a year for the next four or five years. These two payments were from my current account, but I have other savings (S&S ISA and premium bonds) that could cover it.
I have just received the TFLS from pension B (£14,000) and am about to do the paperwork for pension A (TFLS of £30,000-ish and smaller monthly drawdown). Drawdown from pensions A and B combined will equal my annual personal allowance (and there should be a fair bit of pension A left at 65).
I haven't yet made the £2,880 payment into my new SIPP for 2018-19, and when talking to a friend yesterday she said that this was pension recycling so now I'm worried ... is it?!?