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Have I got enough to retire - asking for a friend

Including Financial Independence and Retiring Early (FIRE)
Myfyr
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Joined: November 4th, 2016, 2:34 pm
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Re: Have I got enough to retire - asking for a friend

#325431

Postby Myfyr » July 11th, 2020, 5:13 pm

ursaminortaur wrote:
Myfyr wrote:
ursaminortaur wrote:
I'd agree with crystallising the remaining DB first so that taking it doesn't trigger any LTA excess charge since it has such a large revaluation and it is much messier dealing with the excess charge with a DB. However unless the LTA is abolished (or dramatically increased eg back up to £1.8 million) you would still be hit with a large excess charge at age 75 for the uncrystallised remaining pot so it would be better to crystallise that immediately after the DB pot so that the growth can be removed before you reach 75 thus minimising the total LTA excess charge.


A small pot of £10k uses zero LTA.

He has taken one small pot of exactly £10k and can take two more which will give an extra £5k PCLS and reduces the LTA charge by the same amount. A well known provider, ahem, will create an artificial small pot of exactly £10k to facilitate this.so rhat is just under 1% LTA saved for each small pot taken.


OK that should work since he doesn't have any protections.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/small-pots-defined-benefit-trivial-commutations/#

If a member has funds in excess of the limit in an existing single arrangement, some of which are then moved into arrangements set up to allow a member to take one, two or three small lump sum payments under Regulation 11A, this will entail the setting up of one or more new arrangements. This could potentially have consequences if the member has valid enhanced protection or any of the fixed protections (i.e. the protection would be lost).


Sadly no protections. In retrospect guilty of paying too much into pensions in the last 5 years. Still, better to have too much pension than too little.


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