magazine archive

magazine archive

Ask Tom

‘How does the lifetime allowance test at 75 work?’

Thursday 19 Dec 2019

My SIPP is currently worth £900,000. If I crystallise the fund into drawdown today, will that mean I avoid a lifetime allowance charge if it subsequently grows in value above £1,055,000? Romesh Tom Selby AJ Bell Senior Analyst says: There are a number of ‘benefit crystallisation events’ which HMRC...

‘How much can I pay into a SIPP when I’ve also got a defined benefit pension?’

Thursday 12 Dec 2019

I’m a civil servant and fortunate to have a defined benefit pension. I plan to retire prior to my scheme’s normal pension age and intend to leave this pension preserved as long as possible. I will be receiving a lump sum in the region of £60,000 from some investments and I’m considering adding this...

‘What would happen to pension tax relief under Labour?’

Thursday 05 Dec 2019

What would happen to pension tax relief under Labour? I know they’ve proposed increasing income tax for the wealthiest but wouldn’t this just encourage more people to pile money into pensions? Jeffrey It’s impossible to know for sure what either of the major political parties will do on pension tax...

‘Am I getting value for money with my workplace pension?’

Thursday 28 Nov 2019

I’m just getting started saving in a pension (bit of a delay as was focused on paying off some credit card debts and saving for a house in my twenties). I’ve been automatically enrolled into a scheme through my employer and they are charging me 0.75%. Should I just stay where I am or move my money...

‘How much can I put in my SIPP when my only income is from pensions?’

Thursday 21 Nov 2019

I am retired and my income is all from pensions. How much can I contribute to my SIPP in this tax year? I have no other earned income and have not yet taken any income from my SIPP. Anonymous Tom Selby, AJ Bell Senior Analyst says: You are only able to make tax-relieved pension contributions up to...

'Help, I've fallen into a pensions tax trap'

Thursday 14 Nov 2019

I’ve just taken £10,000 out of my SIPP (my first withdrawal) to pay for a new car. I expected a quarter of the withdrawal to be tax-free, with the rest taxed in the same way as income. As a basic-rate taxpayer earning around £30,000 a year, I figured this would mean I’d pay £1,500 on the taxable...

‘How can I access £10,000 a year from my pension?’

Thursday 07 Nov 2019

If I had £100,000 invested in various investment trusts, income funds and shares and wanted to go into drawdown, how would I go about this? Could I draw down £10,000 a year so that in any one year I have £2,500 tax-free for the first two months and pay tax on £7,500, paid in monthly instalments of...

‘How are increases in pensions worked out?’

Thursday 31 Oct 2019

How are state pension and lifetime allowance annual increases decided? Colin Both the state pension and the lifetime allowance – the total amount you can save tax-free in a pension – have been subject to significant change in recent years. The state pension was reformed in 2016, with the previous...

'Should I wait to dip into my retirement pot?'

Thursday 24 Oct 2019

I am 58 years old and gave up full-time employment at the age of 53 to pursue my own interests. I have three separate pension pots of £30,000, £100,000 and £200,000 from previous employments and to date I have not touched any of them. Should I continue this way until I reach retirement age when...

‘What should I avoid doing with my pension pot?’

Thursday 17 Oct 2019

I often read experts giving their ‘top tips’ for pension saving and drawdown, but what are the things I should avoid doing with my retirement pot? I’m thinking mainly about drawdown as I’m approaching my 60th birthday and plan to retire at 65. Gareth Tom Selby, AJ Bell Senior Analyst says: Here are...