magazine archive


magazine archive

Ask Tom

‘Can you explain how flexi-access drawdown works?’

Thursday 16 May 2019

I understand I can take 25% of my SIPP as a tax-free pension commencement lump sum (I have no scheme specific protection in excess of 25%). If I chose a flexi-access drawdown option, does the PCLS have to be taken as one payment before any of the remaining 75% potentially taxable pension is...

‘How can I avoid breaching the lifetime allowance?’

Thursday 09 May 2019

I’m 41 and have managed to save around £310,000 overall in three defined contribution pension pots. I wanted to know what pension growth rate I should use as a conservative estimate to highlight what I might expect at 58 (earliest age to retire), 60 and 65. Should I continue paying into my pension...

'How do I find the best annuity rate?'

Thursday 02 May 2019

‘There are numerous publications and websites to compare platforms but how can a private investor find the best annuity rate?’ David Tom Selby AJ Bell Senior Analyst says: Can I start by commending you for looking to shop around the retirement income market - this is an absolutely essential part of...

‘What tax charge will I face at 75 in relation to the lifetime allowance?’

Thursday 18 Apr 2019

I am 64 years old and understand that on attaining 75 there is a compulsory tax charge (triggered by what I understand is called a ‘benefit crystallisation event’) in relation to the lifetime allowance. But what type of tax is liable? Is it income tax or a 55% penalty? I also have 75% of my fund...

‘What are Pensions Dashboards and when will I be able to use them?’

Thursday 11 Apr 2019

What are ‘Pensions Dashboards’ and when will I be able to use them? Felicity from Gloucestershire Tom Selby, AJ Bell Senior Analyst says: You’ve probably read a bit about Pensions Dashboards in the past week or so after the Department for Work and Pensions gave the initiative the green light...

‘How much should I worry about drawdown charges?’

Thursday 04 Apr 2019

I’m researching my options before going into drawdown and came across some research that suggests charges can range between 0.4% and 1.6%. Is a price difference of 1.2% worth worrying about? Emma, via email High costs and charges can have a huge impact on your retirement, so making sure these are...

‘Should I spread my money across different providers?’

Thursday 28 Mar 2019

There have been various horror stories about investments failing and people losing everything. What are my rights if this happens and is it worth having my money with lots of different companies to maximise FSCS cover? Jane, via email Tom Selby – AJ Bell senior analyst This is a common question and...

‘Have we got enough pension savings for £25,000 annual income?’

Thursday 21 Mar 2019

Anonymous My wife and I have just turned 65 and are about to start taking an income from our pensions. I have a private pot worth just over £300,000 and we also have a bit of state pension each (worth about £10,000 a year combined). We have paid off our mortgage and need a bit of help managing our...

‘Can you help me understand the state pension age changes?’

Thursday 14 Mar 2019

Trevor says: I’m a bit confused about the state pension. I’ve seen some stories saying it is now 65 and three months – does that mean it won’t be increasing to 66? Tom Selby, AJ Bell senior analyst says: Unfortunately no, but it’s not surprising the approach the Government has taken to raising the...

‘Should I invest my pension in cash while markets are uncertain?’

Thursday 21 Feb 2019

Mike says: ‘With all the uncertainty going on at the moment I’m nervous about investing my entire pension pot in the stock market. I’m 45 and not planning to draw an income from my fund until I’m 65 – does it make sense to invest in cash in the short-term?’ Tom Selby, AJ Bell senior analyst says:...

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