magazine archive
magazine archive
Ask Rachel
Explaining the lump sum allowance and the money purchase annual allowance
Thursday 15 May 2025If a person has defined benefit pension and two SIPPs, can they take a tax-free lump sum from that pension in, say, year 1, and subsequently a monthly taxable income; then in, say, year 4, take a tax-free lump sum from SIPP 1 and start drawdown; then, in, say year 7, take a tax-free lump sum from...
I’m approaching 75 and thinking about how to use my tax-free allowance
Thursday 08 May 2025I’m approaching 75 & thinking about the 25% tax-free allowance. I’ve already taken the 25% from my SIPP. But I also have two stakeholder pensions of about £250,000, and I’m considering taking the tax-free portion and paying it into family ISAs. I assume dying before 75 would be beneficial, tax-...
How does it work if I leave a SIPP to a beneficiary?
Thursday 01 May 2025I am interested in planning for my beneficiaries as much as my own finances. I understand that my SIPP beneficiaries can inherit their share as a SIPP. Is that right? If they have (or open) an AJ Bell SIPP, can they inherit into their SIPP directly, all done within AJ Bell, not having to go via an...
What is the tax situation when making withdrawals from my pension?
Thursday 17 Apr 2025I am wondering if I have misunderstood how the UFPLS (uncrystallised funds pension lump sum) withdrawal arrangement works and how much tax-free element would be available to me over the lifetime of my pension and its overall withdrawal. I understand there is a lump sum allowance for tax free...
Why has my state pension taken a hit after contracting out?
Thursday 10 Apr 2025I worked continuously from 1970 to when I retired at 55 in 2010. Therefore, I have more than 40 years national insurance contributions and my state pension has been paid to me since May 2020. Well before this date I obtained an online state pension forecast and was surprised that I had to make even...
How do I go about taking a lump sum from my SIPP?
Thursday 03 Apr 2025I have a question about taking a lump sum from a SIPP. Mine is fully invested, so obviously there’s no cash available immediately to pay a lump sum and the total value of the fund is changing daily, so my question is: how would you decide what the maximum lump sum is that I could take, given the...
How much will my state pension increase by in April?
Thursday 27 Mar 2025I am aged 78 and have been receiving my state pension for the last 13 years. I know that my state pension will increase in April. Can you tell me how much it will increase by? Leonard Rachel Vahey, AJ Bell Head of Public Policy, says: The media has recently been full of the 4.1% increase to state...
Will my defined benefit pension increase in line with inflation?
Thursday 20 Mar 2025I am aged 63, and will start to collect my work pension in two years’ time. I have a defined benefit scheme which I left about a year ago after working for the company for about 35 years, as well as a SIPP. I wanted to check if the pension I get from the defined benefit scheme will increase each...
How can I check my entitlement to a full state pension?
Thursday 13 Mar 2025I am aged 58. Like many people I guess, I have some gaps in my career where I haven’t earnt anything. I am now worried these gaps may mean I cannot get my full state pension. How can I check that? And if I am short is there anything I can do about it? I keep seeing something about plugging national...
Can I still use a cash ISA as a way of saving for retirement?
Thursday 06 Mar 2025I have read some press reports about the Government getting rid of cash ISAs. I have an old one of these which I took out a few years ago, but I would like to take out a new one with a fixed interest rate. I want to do this before the end of the tax year in case something happens. I also have an...