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Consolidation and TFLS

Lemon Pip
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Consolidation and TFLS


Postby Pheidippides » June 11th, 2019, 3:09 pm

Hi All,

54, 5 months and counting...

I am now looking at the logistics of collecting my TFLS. My current DC Portfolio is rather spread around:

210K - SIPP - Single Names and some cash (all my choice)
340K - Standard Life - Employer Lifestyle Fund
260K - Fidelity - My choice of funds
12K - Roy Ldn (2 x 6K Pensions)

Do I really have to take out 25% of each? Ideally, I'd like to tax the ~200K TFLS out of Standard Life and transfer the balance, but I don't think that is possible.

I was thinking that if I transfer one of my Roy Ldn pots, then I could cash in the rest as a small pension (under 10K) at 55



Lemon Slice
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Re: Consolidation and TFLS


Postby Chrysalis » June 12th, 2019, 1:46 pm

Are you stopping work at 55? Are you going to continue pension contributions? What tax band are you in?

You are correct that you can’t take more than the 25% tax free cash from any particular pot.
You could consolidate all the pensions and take the 25% from the combined single pot.
You can take up to three small pots (less than 10k) without affecting your annual allowance, but only 25% of each will be tax free.

If you are continuing to work and pay in to pensions, be very careful not to trigger the Money Purchase Annual Allowance (MPAA).

Is there any reason you need to take such a large sum from your pensions?

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Re: Consolidation and TFLS


Postby OLTB » June 18th, 2019, 7:49 pm

Just a quick addendum to Jabd2001's post - you won't trigger the reduction in MPAA (£40,000) if you just take the tax free cash - it's only if you start to draw income from your pension pot(s) that your annual allowance reduces from £40,000 to £4,000. The other time that your annual allowance reduces is if threshold income >£110,000 and adjusted income >£150,000 but I won't go into that here as I'll fall asleep myself :)

Cheers, OLTB.

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