BigB wrote:AJC5001 wrote:Ldak wrote:Hello Adrian
Thanks for wading in.
Appreciate SP comments but what can you do if the DB pensions conbined overflow the personal allowance? Wife has full SP due, I have 4 years to top up to get full SP.
You can't do anything except pay the tax due. Some people are not aware that the State Pension is taxable and get a shock when 20% of it disappears.
Before April 2016 it used to be worthwhile for some to defer the State Pension as it gave a useful increase, but deferring the new State Pension is not so good. https://www.gov.uk/deferring-state-pension
If you have £2500 (ish) personal allowance left, you'll have to decide for yourself which of the DB pension, the SIPP or the State Pension uses up that amount.
Adrian
Is it an option to take the lump sums from pensions and reinvest them into ISAs across your and your wife's allowances. To then be used as an income source. You could transfer your 51k over 2 tax years. Your wife's SIPP lump sum will be 70k+ at some point - that could also be transferred in 2 later years with both your allowances. Increasing tax free ISA income and reducing pension/SIPP income, so maybe better use against your tax free allowances?
B
Hello BigB
Indeed it is.
With both our ISAs maximised already this year, and my wife continuing to work and have the funds hopefully to max her ISA the next two years, it will take quite a while to squirrel away my £51k if taken now. However, it could be left till after she retires I guess.
I do like he idea of never paying tax on the 25% tax free lump sum once received when finally taken as income to spend.
Thanks