When Is The Best Time Of The Year / Calendar , To Start A Persons Private Pensions ;

[grahammlong]

Dear good Ab'ers When is the best time of the year / calendar, to start a persons private pensions ; near your birthday ? Start of the fiscal year ? or another time ? Thanks good Ab'ers GL.

[woofgang]

Do you mean put money into one or start drawing it?

[Gizmonster]

I would have thought that it wouldn't matter - the earlier the better in my opinion, so your pension has more time to grow.
The only exception I could possibly see, is if you've decided to go for a medium to high risk strategy, where the growth of the pension pot relies heavily on the stock market .... then maybe if you could figure out if the market is historically higher at certain times of the year, then that might make a difference.

[grahammlong]

Hi WG. drawing on the persons private pensions , taking out, monthly - thanks :-)

[Gizmonster]

Ah well that makes sense now .... and makes my post redundant now lol :P

[woofgang]

that depends on the pension.....will it increase in value if you don't draw on it? Will it put you into a higher tax bracket for the year that you first draw it?....ie how much will your earnings have been for the year that you start drawing it?

[Peter Pedant]

tomorrow

you get tax relief your contributions

things change
As a general rule if you are a UK resident taxpayer under the age of 75, you can contribute as much as you earn each year to your pensions, up to the annual allowance of £40,000. If you are not earning enough to pay income tax, you can still receive tax relief on pension contributions up to a maximum of £3,600 a year.

so it is 40k up to 6 Apr 18 and another 40K in the financial year afterwards....

[Peter Pedant]

drawing on it etc ?

no - use the product - the pension that is ! - as it is designed and not as `1) a cash cow 2) a tax break 3 ) a little sunday outing fund etc etc 4) a choccy cake fund 5) .....

[Hymie]

Woofgang offers good advice in that you need to ensure that by taking the pension you will not end up in a higher tax bracket as a result. For this reason it can be good to start a few months before the end of the financial year (early April) if you are still receiving employment income.

Bear in mind that you can take 25% of the pension pot tax-free.

You will need to look at how you want the remainder invested (as an annuity/draw down etc) – don’t forget the potential for the remainder of your pension to be passed on to your heirs when you die.

[Peter Pedant]

// Woofgang offers good advice in that you need to ensure that by taking the pension you will not end up in a higher tax bracket as a result. //

is probably the crappiest advice I have ever read on pensions. - you would be in a higher tax position because your income would be greater.

and if you were in a high tax bracket you wouldnt be on AB asking us bozos for advice

anyway - a decent spectrum of views

[Hymie]

I have to option of taking my company pension early – the main reason for not doing so is that the money from that pension would be taxed at 40%, as a higher rate tax-payer.

Such advise would not appear the most crappy advice I have ever read on pension – but really quite sensible.

I would be willing to bet that there are loads of people who have made the mistake of drawing their pension – not realising that it has made them a higher rate tax-payer.

I know lots of stupid people earning well over £45k.

[woofgang]

PP in the first year of pension, assuming that you can afford to do so, it may be financially sensible not to start drawing pension....this will reduce your income for that year and lessen your tax burden for that year.