Can I move all of my pension pots into one SIPP and drawdown a 'yearly wage'?

02 November 2021

Question by Ashley


I currently have a frozen final salary with a transferable value of £250,000. I also have another frozen L&G pension that took over with a pot of £79,000. My partner works at the same firm and has the same pensions frozen with pots of £187,000 (transferable value) and £40,000 respectively.

My mortgage finishes in under 5 years time at which stage I will be 57. My question is can I for example move the transferable value on the first pension of £250,000 to a SIPP or alternative pension and draw down 15,000 per year after the tax free lump sum of £100,000 making an income of £25,000 per year for 10 years until my state pension is due and thus semi retire?

The plan would be to continue in a similar vein with all the pots so that both myself and my partner can semi retire and will have a good supplement to our state pensions when the time comes. The annuity on the £250,000 final salary pension is £6,500 per year only. Is my plan realistic and feasible or does it not work this way? Basically get all pots into one SIPP or similar and draw down a yearly wage so to speak. Many thanks, Ash.

Answered by Boring Money

Hi Ashley,

Thanks for your question.

This is definitely an option that is open to you and one that I have helped a lot of people put into place. It is all about whether or not you have enough money.

With a final salary pension you do not have to worry about your money ever running out. As long as you are breathing then you will get an income.

If you transfer the pension then you run the risk that this pot of money will run out and mean that you are left to rely on your state pension. The state pension is very unlikely to be enough to live on.

The big question is if you transfer will you have enough money to last for the rest of your life. I can't give you an answer on this as I do not know enough about you like how much you spend, what other assets you have and other similar information.

If this is something you would like to find out more about then drop me a message and we can talk in a bit more depth and see if we can get you both retired!!

Luke James

Answered by

Boring Money