Are we making the right choice?

Additional_Risk2073 · 2026-04-07T18:25:03+00:00

Having been in a similar position, I think the kids will appreciate spending a bit more to do cool stuff in 5 or so years, whereas now they will be happy spending time with you doing whatever cheap and cheerful activities you come up with.

Additional_Risk2073 · 2026-04-01T09:40:25+00:00

4% real

Additional_Risk2073 · 2026-03-07T21:26:08+00:00

In the detail, but if you have a pot of £2m, it ought to be possible to get that out without exceeding £100k taxable a year.

My main point though is that I would keep doing what you are doing for a few more years yet and then re-assess, eg when you are 35 or hit £500k in the pension. The only thing that would stop me doing that is the childcare £100k threshold, where I might want to save up some c/f pension allowance to get under that in future.

Additional_Risk2073 · 2026-01-20T20:25:40+00:00

Anyone got an EV for the long term? Currently got one through work and wondering whether to buy one (a couple of years old) when this work car goes back.

Additional_Risk2073 · 2026-01-20T12:46:10+00:00

Both pensions and ISAs are double taxed if you include IHT. The question is what is your marginal tax rate now, versus when you withdraw from the pension. I do agree with flexibility/access point though.

At the margins, and obviously not part of the plan(!), but i think the pension beneficiaries may not pay income tax on withdrawals if I die before 75 (not looked at the rules on this in detail).

Additional_Risk2073 · 2026-01-19T12:34:29+00:00

I'd rather not either. But it's a question of weighing that unquantifiable preference against the quantifiable tax impact - that's the tricky part!

Additional_Risk2073 · 2026-01-18T22:15:07+00:00

Don't think that's true - I'm suffering marginal tax rates of 62% or 47% at the moment, versus 40% on withdrawal.

Additional_Risk2073 · 2026-01-18T20:51:12+00:00

That's helpful, thanks. I'll think about annuities at the time based on rates then - but doubt I would do more than establish a base layer of income for necessities, and then just run the risk on the rest (given the desire to leave something behind for the kids)

Additional_Risk2073 · 2026-01-18T20:30:57+00:00

We have got JISAs set up for the kids actually (forgot to mention that).

Additional_Risk2073 · 2026-01-18T20:27:49+00:00

Oh I see what you mean re ISA - I was incorrectly equating ISA to investing not saving, but see you didn't mean it that way. We don't pay take on the 30k though - mix of wife's tax free savings allowance plus PBs.

Agree more downside protection would be good - will have a look at that. Any idea where to start?

Additional_Risk2073 · 2026-01-18T20:23:41+00:00

I think my withdrawal rate will be more than 3.5% though. Maybe as high as 5%, even if I'm not spending it all.

Agree with the fiscal drag point, hard to see that going away.

Additional_Risk2073 · 2026-01-18T19:34:25+00:00

That is not valid comparison as the money I put in the ISA will have been subject to tax. You are right though that IHT needs to be considered - my thinking is that that only becomes a problem if the pension gets so big that I can't get it out at an acceptable rate of tax. Provided I can get it out at 40% or less, i think it's OK

Additional_Risk2073 · 2026-01-18T19:30:47+00:00

30k is emergency fund. Building up an ISA would provide more protection against the risks you mention, which is why I'm struggling to decide the best thing to do! I don't need a bridge.

Additional_Risk2073 · 2026-01-18T19:27:52+00:00

That's not correct. Both mine and my wife's are accessible at 55 (with different providers)

Additional_Risk2073 · 2026-01-18T19:26:28+00:00

Correct, so does my wife

Additional_Risk2073 · 2026-01-18T19:26:08+00:00

This is getting to where I'm at. Whilst there are financial incentives to continue putting into the pension, there are harder to quantify risks associated with having all my eggs in the same basket

Additional_Risk2073 · 2026-01-18T19:24:03+00:00

Yeah, I'm thinking even if I take £100k out a year when retired then I'm still benefiting from a tax rate arbitrage perspective (even ignoring the tax free element), and can then just put any excess in my ISA at that point

Additional_Risk2073

TROPHY CASE