In the days when you were forced to buy an annuity, the tax free cash made sense. Now with flexible drawdown, better to leave invested and continue to get 25% tax free on the uncrystalised growth. Can always access a lump sum if and when you need it. Love your relaxed presenting style.
@Richard-q1
Ай бұрын
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
@Marten_t
Ай бұрын
Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks
@Richard-q1
Ай бұрын
@@Marten_t However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments
@Marten_t
Ай бұрын
@@Richard-q1 Oh please I’d love that. Thanks!
@Richard-q1
Ай бұрын
@@Marten_t Clementina Abate Russo is her name
@Richard-q1
Ай бұрын
Lookup with her name on the webpage.
@Autonomous1969
26 күн бұрын
When I retired I took 25% tax free from one of my pensions. Why? Because I'm a single homeowner and I lived paycheck to paycheck until I paid my mortgage off. I never had savings as I put it all into my pensions. So I took it just so I have the comfort of having the money if I need it.
@michaeli160954
11 ай бұрын
I’ve just starting taking £1000 a month from my £500k pension pot. Royal London are ‘crystallising £4000 a month. Hopefully my un-crystallised pot will grow at a good rate over the next 10 years, before I run out of tax free withdrawals. Great video.
@Finglebat
11 ай бұрын
Another great video, interesting insights... I didn't realise that there was a limit on the 25% tax free element of your pension (LTA maximum, not that I am likely to achieve the limit, but still good to know).
@DianneSullivan
11 ай бұрын
We can all dream of having an LTA "problem". I'm pleased to hear you enjoyed this video.
@craftypam9992
4 ай бұрын
@3:45, you confused me! I thought income from a S&S ISA was tax free. So it wouldn't be "alternative source income like the State Pension or rental property" as you said. This is important to me, as I will soon be using my ISA to supplement my withdrawals from my SIPP top up my income, which is mainly my State Pension. The government got enough taxes out of me while I was working, I don't want to give up an unnecessary penny more in tax now I'm retired!
@tonymariner5519
3 ай бұрын
I think that is the point she was making .... SS ISA are tax free and can be taken along side any drawdown
@CB-fz3li
11 ай бұрын
My understanding is you don’t have to crystallise the full pension amount in one go but can instead choose how much you want to crystallise and can do this multiple times. That makes it more interesting as you can vary how much you take each year and minimise tax liability alongside taking the tax free 25% each time.
@DianneSullivan
11 ай бұрын
Yes precisely! - You're right, exactly the point I make about leaving your pension uncrystallised and taking the 25% in stages. Too many people opt to take it in one go :-)
@guyr7351
5 ай бұрын
I have done precisely this, within a short period. I have two DC pots one is crystallised the other was not. In retiring I needed a Car as had been driving a company car, so took a lump sum to obtain this, leaving a portion crystallised and the rest uncrystallised. The pension provider shows my funds in total and more detail shows the size of both pots. The crystallised portion is still Growing as invested but has no tax free portion. The uncrystallised is also continuing grow. My aim is to leave this fund now until the pot that is crystallised with another provider has been used (potentially 4 years) as 1) for this tax year 24/25 I will use all my personal Allowance on the withdrawals giving me £12500 tax free then tax on anything above that. Feb 25, I have a DB scheme starting so will reduce the draw down out of the DC scheme to the monthly tax free amount. In 26 a full state pension so I will reduce further draw down from the crystallised DC fund. No point having money as you have said if it is gaining more interest invested. The DB scheme will also provide a nice lump sum in Feb to invest in ISA either side of the tax year. I have basically 10 Months to be a little bit cautious with my spending before my DB scheme boosts my income. I should be able to leave the larger DC pot untouched until 2028 or later allowing it to grow and possibly recover from the money I have already taken out.
@johnporcella2375
21 күн бұрын
@@DianneSullivanBy taking the 25% in small chunks, then if the remainder grows, you actually take more than 25% of the original sum.
@user-es2fn1ki4v
9 күн бұрын
@@johnporcella2375 Not if your total pot has reached the limit for the TFLS at just over £250k. You'll pay marginal rate tax on all of it as opposed to 0% up to £20,000 in a cash ISA. Unless there is a change in legislation. Then... if there is a change in legislation... there might not be a TFLS at all. That could never happen though, of course.
@johnporcella2375
9 күн бұрын
@@user-es2fn1ki4v A fortunate problem to have!
@clivedyer17
10 ай бұрын
another great video and very well presented. Not taking your TFLS is normally a good choice, but with recent investment fund performance and the crazy, unstable world we live in, it is going to be hard to convince most people to leave it were it is (despite the data and the long term approach theory). Especially those people who are post 60. Its a balance, how much money will you really need at 80 plus?
@DianneSullivan
10 ай бұрын
Good points - thank you
@davidplanet3919
11 ай бұрын
Thanks Dianne. Lots of things to think about indeed.
@DianneSullivan
11 ай бұрын
Yes there are...hope this helped with some of your decisions
@AgileSnowWeasel
4 ай бұрын
Some DC pension drawdown strategies involve a riskier portfolio pension pot (i.e., what you likely had all your life, mostly equities) and a ~2 year cash-buffer (to ride out downturns without crystallising the lower pension pot value and reducing success chance). Some or all of that 25% could be used to form that cash buffer if life somehow (divorce, etc) had arranged itself so that you couldn't build this yourself by retirement age. The other reason is mortgage payoff, unless you have a massive pension pot that you can continue to pay it off.
@garyreilly1544
Ай бұрын
You are only talking about DC pension schemes, does this apply to DB schemes?
@johnporcella2375
21 күн бұрын
Could you or anybody please clarify something said in the video? It is stated that if a pension fund holder dies after 75 years of age, the beneficiaries will pay Income Tax at their marginal rate "of the fund"! Can that be correct??? My belief was that they paid Income Tax on what THEY withdraw feom the oensiknnfund inheritance! Therefore, if they withdraw nothing, they pay nothing. Perhaps a video dealing with what happens to funds before and after 75 might help!
@ianjames3078
Ай бұрын
You should make it clear in the subject or detail it’s DC not DB you’re discussing.
@3thinking
Ай бұрын
What about taking £20K tax free each year to move it into a stocks and shares ISA. Reason being gains and income in the ISA are tax free. Income from the pension is taxed above the tax free allowance. So if your pension income is above the tax allowance, having income from ISAs makes more sense. I know there are IHT benefits to the pension.
@johnporcella2375
21 күн бұрын
You answered your own question! Leaving the money in a DC pension fund gives it the same advantages as in an ISA, no Income Tax and no CGT, AND also NO IHT either, as a trust.
@peterrogers3085
8 ай бұрын
Is it not wise to take the 25% tax free and move that into ISA's as the government could change the rules on the tax free withdrawl in the future?
@bitsandblocks7826
4 ай бұрын
Possibly if less than £40K lump sum for a couple. Otherwise you'd have to drip feed it over several tax years to keep any growth tax free.
@dontuno
2 ай бұрын
Don't forget ISA's will become part of your estate when you snuff it and this might have implications in regard to inheritance tax whereas pension funds are entirely outside your estate. Clearly and as you say, any government could throw a spanner into the works, but I'd like to think two things here, A, they would be very unwise to alienate pensioners and B, hopefully there will be plenty of warnings before they did so.
@3thinking
Ай бұрын
@@dontuno I don't think this new government care one bit about older voters, so attacking all pension benefits (outside of public sector) are likely on their radar.
@nicobass1966
11 ай бұрын
Thank you
@DianneSullivan
11 ай бұрын
You are most welcome
@mikeonfreeserve2926
4 ай бұрын
Hi Dianne, very helpful and has persuaded me not to take the full 25% tax free in one go. However, let's say I took 2% of it each year, does the tax free portion increase as an amount (not as a percentage) as the fund grows? So if I have, easy numbers, £200k total pot , so 25% is £50k, but in year 2 of my retirement the pot increases by 10% would I have 48% of £196k (£200k less 2%) left to take or, 48% of (£196K + £1.96K =) £197.96k, if the pot grows by 10%. In other words, is the 50% money limit set at a point in time, or is a percentage based on whatever the pension pot value is at a point in time and so the figures increase as the pot grows? You've got a new subscriber!
@bitsandblocks7826
4 ай бұрын
Yes you will get 25% tax free growth on any uncrytalised funds. Each time you take tax free cash 3x that amount is crystalised and no longer benefits from tax free status.
@sissano1
10 ай бұрын
Hi, with the fast approaching Universal basic income and CBDC and cash being worthless day by day in the bank along with the reducing in march leading hopefully to abolition of inheritance tax .....its a flick of the coin...
@mark196233
4 ай бұрын
This doesn't apply to (my) DB pension. You have to take a lump sum with the option of a higher lump sum and lower pension. You can work out how long you have to live before you're worse off if you taker the higher amount.
@sissano1
4 ай бұрын
@@mark196233 depending on your age ATM , there is a very high chance your pension will not exist on retirement with whatever pot you have going on to your UBI allowance....if you sign up to it if course!..most people will be forced to through ignorance!
@GudrunScharrer
9 ай бұрын
We are already in the big crash, Inflation is a catastrophe. This CPI report is a colossal failure. To bring the housing market to a halt, the FED will have to pull all the stops. The unfortunate issue is that other markets are being decimated. If you want to stay green, you have to rely on a lot of diversification. Currently up 14% and being careful. Still a better deal than leaving it in a savings or checking account yielding 0-1 percent interest.
@brownwellson54
9 ай бұрын
People believe their currency has the worth it does because they have no other option. Even in a hyper-inflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
@LorenaG.Cresswell
9 ай бұрын
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
@brownwellson54
9 ай бұрын
How can I reach out to this coach? because I'm seeking for a more effective investment approach How good is this person at portfolio diversification, particularly with regard to digital assets?
@LorenaG.Cresswell
9 ай бұрын
My advisor is ‘’ "Stephanie Kopp Meeks. she’s highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market
@brownwellson54
9 ай бұрын
She appears to be well-educated and well-read. I ran a Google search on her name and came across her website; thank you for sharing.
@pascaljoly5752
4 ай бұрын
how is the 25% tax free cash calculated? is it based on your total pension pot on the day you turn 55? so let's say you don't take anything and 3 years later you decide you want to take it. by then you can assume that your pot will have grown so would the 25% based on this pot or the one when you turned 55? also, by the same token, what if you decide to take it in stages (for example, 10%, 10% and 5%), again, what is it based on?
@slayerrocks2
2 ай бұрын
It's based on the value at the time you crystallise (withdraw any tax-free amount) That's why it makes sense to only access it as you need it. A pot of 100k at 55 would yield 25k tax-free. If you took a small percentage each month over 10 years, it could be worth 200k and yield 50k tax-free, even after all the other tax-free bits had been taken out over the years.
@DeeCee-nb6ev
5 ай бұрын
If you have a Gauranteed Annuity Rate wouldn’t this be a good reason to not take the 25% cash as the cash is taken first and then the gauranteed rate is applied to the remaining 75%. Assume that the cash is not required (no debts, no mortgage) and that a regular income is required. I realise the gamble is that you need to live long enough and that you are also going to be paying some tax if over the threshold.
@slayerrocks2
2 ай бұрын
If you buy an annuity for the full amount you won't benefit from the tax-free portion, and it will be taxed when you exceed your personal allowance. I would put the tax-free amount into an ISA, and draw from that as I need it. If in doubt seek advice from an independent financial advisor.
@timwaldram5619
2 ай бұрын
I don’t plan to take my tax free cash from my DC pension in one go but I do think I should take the tax free cash from my work DB pension as a lump. Does this DB lump count towards the £250,000 lifetime tax free limit?
@kw8757
17 күн бұрын
4:23 The (old) LTA limit isn't £250,000, it's £268,275, and yes any lump sum taken from any pension counts towards your 25% TFLS.
@alisonp4915
7 ай бұрын
Apologies as just learning this. If I take £100 a month from my workplace pension pot will i get 25% tax relief on that monthly drawdown? Thank you
@richardlincoln886
3 ай бұрын
Can you pull the taxed part of a DC without touching the tax free? i.e. use the taxed part up to the 20% tax threshold then take the tax free later when other income (state pension etc) is pushing me over the bottom rate tax anyway. Do you have to in effect take the 16760, with the top 25% being tax free and the bottom 12750 using up the tax allowance?
@slayerrocks2
2 ай бұрын
You can crystallise and leave the taxable amount invested, but you can't do it the other way around. You could put the tax-free amounts into an ISA, if you so wished.
@richardlincoln886
2 ай бұрын
@@slayerrocks2 Thanks, yes - In the intervening month I've learned a lot, its quite a curve to understand all the options.
@markmorris4979
7 ай бұрын
Can i just ask if i transfer a company pension to a flexi drawdown sipp does the government add 20 percent to it up to a 60k allowance or is that after i start paying extra contributions
@DianneSullivan
7 ай бұрын
The tax relief is on the contributions when they are first made not when you transfer to another provider. In any case, sounds like you are about to crystallise your pension if you are moving it into a drawdown, so congratulations on your retirement!
@markmorris4979
7 ай бұрын
Thanks for your reply I think I've confused myself 😅,I've taken early retirement to look after someone and am 55 soon and don't need to take any money just yet as I have savings but I'm not sure if I should transfer company pension into a drawdown sipp for when I do need it ,and also if It would be beneficial to add to it with some of my savings,sorry for the long questions
@UKDroneAdventures
7 ай бұрын
When I am 55, could i start putting all of my salary into pension and then start paying myself from my pension? If get paid £4000 per month (for easy maths), then could I give myself £1000 tax free and then pay myself the £3000 taxed?
@DianneSullivan
7 ай бұрын
Unfortunately HMRC already thought of that :-). When you crystalise your pension and start taking an income from it, you can only pay back in £10k per year tax free instead of £60k (or your total earnings if lower)
@UKDroneAdventures
7 ай бұрын
@@DianneSullivan Ah. Okay. So if I start taking money from a pension fund then I can only pay in £10k per year from then on? I have a number of pension funds. Could I start taking money from one fund but still pay the full amount I to the non crystallised fund as before?
@terrybrown3486
5 ай бұрын
@@DianneSullivanif they only take their TFC they can still pay 60k in p.a.
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