Drawdown question.

[sweepster70]

I'm hoping to put my 60 pension into a SIPP each month until I get to 65. I hope to combine my AVC's, I'm paying into the new pension and private SIPP to a drawdown pension at 65. Is this possible? Thanks.

[RobertT]

I'm hoping to put my 60 pension into a SIPP each month until I get to 65.

You should be ok, but you might want to read up on pension recycling rules to make sure you don't fall foul of them.

I hope to combine my AVC's, I'm paying into the new pension and private SIPP to a drawdown pension at 65. Is this possible? Thanks.

From the RMCPP AVC Handbook:
"If you leave the Collective Plan before you get your income for life, lump sum and AVC savings, then you could choose to transfer out the AVC savings you’ve built up."

[sweepster70]

Thanks Robert. Always very helpful.

[sweepster70]

I've just checked out the recycling rules.
I will be putting my NRA60 that I receive monthly into a SIPP from 60-65 when I am hoping to retire. It will be around £10,000 a month. The tax free lump sum will be spent on house improvements at 60, before I fully retire at 65, so should be OK.
The AVC I'm investing into Scottish Widows is on top of the guaranteed lump sum and 1% booster, so none of that should be part of the tax free lump sum, so that should be safe?
I also have a little extra money in my NRA65, that will be uncristalised. Would it be worth putting that into the drawdown?
I've just found out, because of my wages and SIPP contributions, I can claim an extra 20% tax relief myself, as it puts me in the higher tax band.

[RobertT]

I've just checked out the recycling rules.
I will be putting my NRA60 that I receive monthly into a SIPP from 60-65 when I am hoping to retire. It will be around £10,000 a month. The tax free lump sum will be spent on house improvements at 60, before I fully retire at 65, so should be OK.

£10k a month?
That's one good pension!

The AVC I'm investing into Scottish Widows is on top of the guaranteed lump sum and 1% booster, so none of that should be part of the tax free lump sum, so that should be safe?

Safe from what?
The lump sum(inc booster) is there to fund the tax free lump sum with your RMCPP pension.
The AVC can also fund the tax free cash.
Or you could also transfer out one or even all three elements if you want to.

I also have a little extra money in my NRA65, that will be uncristalised. Would it be worth putting that into the drawdown?

It's not possible to transfer out the RMSPS element(2010-2012) of your Age65 benefits, unless it's to another DB scheme.
The RMPP part(2012-2018) could be transferred, but is subject to the £30k advice rule and finding a provider willing to accept it.
The Cash Balance(2018-2024) is no longer dependent on the same rules, so can be transferred out without advice(even if over £30k).
I believe there's also a clause which says if you took any Cash Balance with your Age60, the remainder can't then be transferred out.
Whether moving that to a SIPP is a good thing to do, will be down to your own tax liability, personal circumstances and choices.

I've just found out, because of my wages and SIPP contributions, I can claim an extra 20% tax relief myself, as it puts me in the higher tax band.

My understanding is you can claim an extra 20% tax relief on any wages income you've paid 40% tax on, which is normally anything over £50,270.

*The rules in Scotland are different.

https://www.gov.uk/tax-on-your-private- ... tax-relief

[Hitcher]

I will be putting my NRA60 that I receive monthly into a SIPP from 60-65 when I am hoping to retire. It will be around £10,000 a month.

Why are you still working?