How you can take a tax free income with Flexi Access Drawdown

[@dominic8218]

Great advice Alex and exactly the way I’m going. Utilising the personal allowance and taking the tax free amount over next 10 years. Important to note that not all SIPP providers allow you to do this on a non advised basis. Great vlog 👍🏻

[@ChristopherRose-v5i]

What if you are already receiving your pension dose that not affect this

[@AlexNorman-Jones]

Yes so any other taxable income will have to be factored in. May look at a video no how income and pensions are taxed in the future.

[@Ramz18]

Great video, really enlightening! I still need to go back to your prior videos and really understand how to calculate my pension goal with a variable date of retirement (I.e. retire at 50 vs 65 - what’s the pot needed). Please continue with your videos, there’s not much for UK specific content so this is helpful. Thank you

[@AlexNorman-Jones]

Thanks ramz. Yes it hard to say over a video, particularly when you have income such as state pension kicking in at different times. I'll probably do a video soon on the numbers around early retirement. This video looks at how you can try and calculate 'your number'. kzbin.info/www/bejne/oKiVlqCwgM6Badk

[@andyarmitage2895]

Hi Alex thanks for this explanation pensions are so complex :) two questions I have a workplace pension of £192k at present I am 64 next birthday and thinking of leaving work in 6 months, I have some inheritance due so does it make sense to pay in a lump sum of £40k into my pension before April the 6th as it would give me a bigger pot and am I right in thinking I would also get £8k added to the pot as tax relief? I need around £24k a year income so if I take a straight payment from the pot of £12,250 there is no tax to pay but with that can I take another £12k tax free cash, I know doing that £48k will be crystalized so is that the best way to do it and I could repeat that the year after couldn't I?

[@AlexNorman-Jones]

Hi Andy - I have to be careful not to give advice over YT from a compliance persepctive. If you email me at [e-mail] I will respond. Thanks!

[@dubsdolby9437]

Could you take your personal allowance of £12570 from your sipp using dividend payments that sit within your cash account? Then you wouldn't pay any income tax. Is that correct? It's not really a draw down as it is already in the cash account and can be transferred into your bank. But is that classed as within the 25% allowance?

[@AlexNorman-Jones]

That's correct if you have no other income and take taxable income from your crystallised pension, if its within the personal allowance of £12,570 and you have no other income (state pension, rental, db, salary etc), then no tax should be payable on it. Not to sure what you mean on your last question? If its taxable income from your crystallised funds, this wount count towards your tax free cash. Remember, your tax free cash is the 25% of your UNCRYSTALLISED funds, assuming you have the standard 25%.

[@dubsdolby9437]

@AlexNorman-Jones Thanks, Alex. Where I am is I turn 55 in April 2024 my sipp produces around 14k a year in dividend payments which I plan to take throughout the year when they come in as cash and transfer them as my income upto £12570. The rest of my income will come from dividend payments from my isa. So can how would it work if I said I wanted another 5k from Draw Down but still keep that tax-free within that 25% limit. The sipp value is around 350k . Much appreciated