ASK TOM Your retirement questions answered
2 | SHARES | 22 August 2019
AJ Bell pensions expert answers query relating to lifetime allowance‘What tax free cash can I take
from my retirement fund?’
ƉŽŝŶƚŝŶƟŵĞ͘
ŶLJĞdžĐĞƐƐĂďŽǀĞƚŚĞůŝĨĞƟŵĞ
ĂůůŽǁĂŶĐĞůĞŌǁŝƚŚŝŶLJŽƵƌ
^/WWǁŽƵůĚĨĂĐĞĂϮρйůŝĨĞƟŵĞ
ĂůůŽǁĂŶĐĞĐŚĂƌŐĞ͘/ĨLJŽƵƚĂŬĞƚŚĞ
ĞdžĐĞƐƐĂƐĂůƵŵƉƐƵŵLJŽƵǁŝůůďĞ
ĐŚĂƌŐĞĚĂƚρρй͘
zŽƵĐĂŶŵĂŬĞǁŝƚŚĚƌĂǁĂůƐ
ĨƌŽŵLJŽƵƌĨƵŶĚďĞĨŽƌĞLJŽƵƌĞĂĐŚ
ϳρǁŚŝĐŚǁŽƵůĚƌĞĚƵĐĞƚŚĞ
ůŝĨĞƟŵĞĂůůŽǁĂŶĐĞĐŚĂƌŐĞLJŽƵ
ƉĂLJ͘dŚĞƐĞǁŝƚŚĚƌĂǁĂůƐǁŽƵůĚ
ďĞƚĂdžĞĚŝŶƚŚĞƐĂŵĞǁĂLJĂƐ
ŝŶĐŽŵĞ͕ŚŽǁĞǀĞƌ͕ƐŽLJŽƵŵĂLJ
ŶŽƚĂĐƚƵĂůůLJďĞŶĞĮƚĨƌŽŵĂƚĂdž
ƉĞƌƐƉĞĐƟǀĞ͘
KŶĞŽƚŚĞƌƚŚŝŶŐLJŽƵŵŝŐŚƚ
ǁĂŶƚƚŽĐŽŶƐŝĚĞƌŝƐĂƉƉůLJŝŶŐ
ĨŽƌ͚ĮdžĞĚƉƌŽƚĞĐƟŽŶϮϬϭς͛͘/Ĩ
LJŽƵĚŽƚŚŝƐ͕LJŽƵ͛ůůŚĂǀĞϮϳ͘ŽĨ
άϭ͕ϮρϬ͕ϬϬϬůŝĨĞƟŵĞĂůůŽǁĂŶĐĞ
ĂǀĂŝůĂďůĞ͕ŽƌάϯϯΘ͕Θϳρʹ
ĂůƚŚŽƵŐŚLJŽƵĐĂŶŽŶůLJĂƉƉůLJ
ĨŽƌƚŚŝƐƉƌŽǀŝĚĞĚLJŽƵŚĂǀĞŶ͛ƚ
ĐŽŶƚƌŝďƵƚĞĚƚŽĂƉĞŶƐŝŽŶƐŝŶĐĞ
ςƚŚƉƌŝůϮϬϭς͘
ƐĂůǁĂLJƐǁŝƚŚƚŚĞůŝĨĞƟŵĞ
ĂůůŽǁĂŶĐĞ͕ƚŚŝƐŝƐĂůůƋƵŝƚĞ
ĐŽŵƉůŝĐĂƚĞĚĂŶĚ/ǁŽƵůĚ
ƐƚƌŽŶŐůLJƵƌŐĞLJŽƵƚŽƐƉĞĂŬƚŽĂ
ĮŶĂŶĐŝĂůĂĚǀŝƐĞƌďĞĨŽƌĞŵĂŬŝŶŐ
ĂŶLJĚĞĐŝƐŝŽŶƐ͘LJŽƵƌ^/WWĂŶĚƉŽƚĞŶƟĂůůLJĂƚ
ŽƚŚĞƌƉŽŝŶƚƐƚŚƌŽƵŐŚŽƵƚLJŽƵƌ
ůŝĨĞ͘ƐĂŶĞdžĂŵƉůĞ͕ǁŚĞŶLJŽƵ
ƌĞĂĐŚLJŽƵƌϳρƚŚďŝƌƚŚĚĂLJ͘
/ƚ͛ƐǁŽƌƚŚŶŽƟŶŐƚŚĂƚǁŚĞŶ
LJŽƵĐƌLJƐƚĂůůŝƐĞLJŽƵƌĨƵŶĚ͕ƚŚĞ
ĂŵŽƵŶƚŽĨůŝĨĞƟŵĞĂůůŽǁĂŶĐĞ
ƵƐĞĚƵƉŝƐĐĂůĐƵůĂƚĞĚĂƐĂ
ƉĞƌĐĞŶƚĂŐĞŽĨƚŚĞŵĂdžŝŵƵŵ
ĂůůŽǁĂŶĐĞĂǀĂŝůĂďůĞĂƚƚŚĂƚƟŵĞ͘
KŶϭƉƌŝůϮϬϭςƚŚĂƚǁŽƵůĚ
ŚĂǀĞďĞĞŶάϭ͘ϮρŵͲŝƚǁĂƐ
ƌĞĚƵĐĞĚƚŽάϭŵĨƌŽŵςƉƌŝů
ϮϬϭςĂŶĚůŝŶŬĞĚƚŽŽŶƐƵŵĞƌ
WƌŝĐĞƐ/ŶĚĞdžŝŶŇĂƟŽŶ͘dŚĞ
ůŝĨĞƟŵĞĂůůŽǁĂŶĐĞĐƵƌƌĞŶƚůLJ
ƐƚĂŶĚƐĂƚάϭ͘Ϭρρŵ͘
ƐƐƵŵŝŶŐƚŚŝƐŝƐƚŚĞŽŶůLJ
ƉĞŶƐŝŽŶLJŽƵŚĂǀĞĐƌLJƐƚĂůůŝƐĞĚ͕
LJŽƵǁŝůůƚŚĞƌĞĨŽƌĞŚĂǀĞƵƐĞĚ
ƵƉϳϮ͘ϳκйŽĨLJŽƵƌůŝĨĞƟŵĞ
ĂůůŽǁĂŶĐĞ͘
ĂƐĞĚŽŶƚŚĞĐƵƌƌĞŶƚůŝĨĞƟŵĞ
ĂůůŽǁĂŶĐĞŽĨάϭ͕Ϭρρ͕ϬϬϬ͕
LJŽƵƌĨƵŶĚĐŽƵůĚƚŚĞƌĞĨŽƌĞ
ŐƌŽǁďLJάϮΘς͕ϬϭϬ;Ϯϳ͘ϭϭйŽĨ
άϭ͕Ϭρρ͕ϬϬϬͿďĞĨŽƌĞƚŚĞůŝĨĞƟŵĞ
ĂůůŽǁĂŶĐĞďĞĐŽŵĞƐĂŶŝƐƐƵĞ͘
dŚĞĂĐƚƵĂůĂŵŽƵŶƚŽĨŐƌŽǁƚŚ
ĂǀĂŝůĂďůĞǁŚĞŶLJŽƵƌĞĂĐŚϳρ
ǁŝůůĚĞƉĞŶĚŽŶƚŚĞůĞǀĞůŽĨ
ƚŚĞůŝĨĞƟŵĞĂůůŽǁĂŶĐĞĂƚƚŚĂƚAt the beginning of April
2016 my SIPP had a value of
£911,240. In order to release
some cash I withdrew my 25%
pension commencement lump
sum (£227,810), thus leaving
£683,430 within the SIPP.
By June 2019, the SIPP had
grown to £1,010,000. I will turn
ϳρŝŶũƵƐƚŽǀĞƌĮǀĞLJĞĂƌƐ͘
DLJƋƵĞƐƟŽŶƐĂƌĞ͗
Is any further tax-free cash
available for me to take?
Can I take small annual
withdrawals to keep below the
ůŝĨĞƟŵĞĂůůŽǁĂŶĐĞƚĞƐƚĂƚĂŐĞϳρ͍
ĂǀŝĚƐ/ŵĞŶƟŽŶĞĚŝŶůĂƐƚǁĞĞŬ͛Ɛ
ĐŽůƵŵŶ͕ǁŚĞŶLJŽƵĐƌLJƐƚĂůůŝƐĞ
LJŽƵƌĨƵŶĚďLJĐŽŵŵŝƫŶŐŝƚƚŽĂ
ƌĞƟƌĞŵĞŶƚŝŶĐŽŵĞƌŽƵƚĞƐƵĐŚĂƐ
ĚƌĂǁĚŽǁŶ͕LJŽƵĂƌĞĂďůĞƚŽƚĂŬĞ
ƵƉƚŽϮρйƚĂdžͲĨƌĞĞ͘dŚŝƐŝƐŽŶĞ
ŽĨƚŚĞŵĂũŽƌďĞŶĞĮƚƐŽĨƉĞŶƐŝŽŶ
ƐĂǀŝŶŐ;ĂůŽŶŐǁŝƚŚƚĂdžƌĞůŝĞĨŽŶ
ƚŚĞŵŽŶĞLJLJŽƵƉĂLJŝŶĂŶĚƚĂdžͲ
ĨƌĞĞŝŶǀĞƐƚŵĞŶƚŐƌŽǁƚŚͿ͘
hŶĨŽƌƚƵŶĂƚĞůLJ͕ďĞĐĂƵƐĞLJŽƵ
ŚĂǀĞĐƌLJƐƚĂůůŝƐĞĚLJŽƵƌĞŶƟƌĞĨƵŶĚ
LJŽƵǁŽŶ͛ƚďĞĂďůĞƚŽƚĂŬĞĂŶLJ
ŵŽƌĞƚĂdžͲĨƌĞĞĐĂƐŚĨƌŽŵLJŽƵƌ
^/WW͘
dŚĞƌĞĂƌĞĐĞƌƚĂŝŶ
ĐŝƌĐƵŵƐƚĂŶĐĞƐƵŶĚĞƌǁŚŝĐŚĂ
ůŝĨĞƟŵĞĂůůŽǁĂŶĐĞƚĞƐƚǁŝůůďĞ
ĐĂƌƌŝĞĚŽƵƚ͘ƚĞƐƚǁĂƐĐĂƌƌŝĞĚ
ŽƵƚǁŚĞŶLJŽƵĮƌƐƚĐƌLJƐƚĂůůŝƐĞĚDO YOU HAVE A QUESTION ON RETIREMENT ISSUES?
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