Fixed Annual Income
£28,632
RAF + State · before tax
RL360 Portfolio
£1.67M
+44.15% since 2015
Max Tax-Free Cash
£268,275
Capped at LSA
Personal Allowance Left
£0
Fully used by pensions
Income Picture
All sources · 2025/26
🇬🇧
State Pension
HMRC · Fixed · Gross
£921/mo
£11,052/yr
✈️
RAF Pension
DB · Fixed · Gross
£1,465/mo
£17,580/yr
🏦
RL360 Drawdown
Variable · on demand
Flexible
£0 – £200k+
⚠️
Critical: RAF + State pensions (£28,632) fully exhaust the personal allowance. Every pound from RL360 is taxed at 20% from pound one, rising to 40% once total income exceeds £50,270.
Current Tax Position
Fixed income only · no RL360 drawn
State Pension£11,052
RAF Pension£17,580
Personal Allowance£12,570 · FULLY USED
Taxable (basic rate 20%)£16,062
Tax on fixed income£3,212/yr
Remaining basic rate capacity£21,638/yr
💡
Draw up to £21,638/yr from RL360 at only 20% tax. Above that you enter the 40% band. Above £71,368 you hit the devastating 60% trap.
Fund Projections — All Scenarios
£100,000 annual RL360 drawdown · Starting £1.7M · ages 70–100
Total Income Tax Calculator
Three income sources · 2025/26 UK rates · Adjust RL360 drawdown to see full picture
Adjust RL360 Drawdown
Fixed income locked in below
State Pension
£11,052
Fixed · £921/mo
RAF Pension
£17,580
Fixed · £1,465/mo
RL360 Annual Drawdown
£0
£0£175,000
Band
Fill
Rate
Tax Due
Personal Allowance
0%
£0
Basic Rate
20%
£0
Higher Rate
40%
£0
PA Taper (~60%)
~60%*
£0
Additional Rate
45%
£0
Gross Income
£28,632
Total Tax
£3,212
Net Income
£25,420
Effective Tax Rate
On total income
11.2%
Basic rate taxpayer
Marginal Rate on Next £1
On additional RL360 drawdown
20%
Basic rate band
RL360 drawn£0
Total gross£28,632
Basic rate room left£21,638
Garth's Key Thresholds
2025/26 · accounting for fixed income
Fixed income total£28,632
Max RL360 at 20% only£21,638
40% kicks inRL360 > £21,638
60% trap startsRL360 > £71,368
60% trap endsRL360 > £96,508
Income Strategy Options
Tax-efficient approaches — accounting for RAF + State pension already in payment
Strategy Comparison
Annual figures · 2025/26
| Strategy | RL360 Drawn | Total Gross | Total Tax | Net Income | Eff. Rate | Notes |
|---|---|---|---|---|---|---|
| No RL360 drawn | £0 | £28,632 | £3,212 | £25,420 | 11.2% | Low income |
| A · Max basic-rate | £21,638 | £50,270 | £7,540 | £42,730 | 15.0% | 20% only — ideal |
| B · Mid higher-rate | £50,000 | £78,632 | £18,885 | £59,747 | 24.0% | 40% on top slice |
| C · Cap below 60% trap | £71,368 | £100,000 | £27,432 | £72,568 | 27.4% | Avoids trap |
| D · Skip over trap | £96,508 | £125,140 | £42,748 | £82,392 | 34.2% | Above trap ceiling |
| E · TFLS + GIA/ISA blend ★ | £21,638 | £50,270 | £7,540 | £62,730+ | 12.0% | TFLS supplements |
| ★ Strategy E uses TFLS of £268,275 outside the pension — income from it is CGT not income tax; does not trigger 60% trap. Net income includes approx. £20,000 from TFLS investment returns at CGT rates. | ||||||
Strategy A · Most Tax-Efficient
Maximise the Basic Rate Band
Draw £21,638/yr from RL360. Combined with fixed income (£28,632), total hits exactly £50,270 — the basic/higher boundary. Every pound drawn costs only 20% tax. Supplement lifestyle expenses using the TFLS capital where needed (no income tax on TFLS). This is the optimal strategy from a tax efficiency standpoint.
RL360 Drawn
£21,638
Income Tax
£7,540
Net Income
£42,730
Strategy C · Balanced Lifestyle
Cap Total Income at £100,000
Draw £71,368/yr from RL360. Total income £100,000 — just below the 60% trap threshold. Higher rate (40%) applies to income above £50,270, but you avoid the catastrophic personal allowance withdrawal. Net income of £72,568 provides a comfortable standard of living. Best for those who need higher income but want to avoid the worst tax outcome.
RL360 Drawn
£71,368
Income Tax
£27,432
Net Income
£72,568
Strategy E · Best Long-Term Structure ★ Recommended
Take TFLS → Invest in GIA + ISA → CGT Route
Crystallise the £268,275 TFLS immediately — completely tax-free. Invest in a General Investment Account (GIA). Draw only £21,638/yr from RL360 (Strategy A level — basic rate only). Use GIA returns to supplement income; these are taxed at CGT rates (24% higher rate) rather than income tax (40%). Each year contribute £20,000 from GIA into ISA — building a permanently tax-free wrapper. After 13 years, over £260,000 sits in ISA generating tax-free income forever, with no impact on personal allowance or the 60% trap. This is the most powerful structure for Garth's position.
TFLS (tax-free)
£268,275
CGT vs Income Tax
24% vs 40%
Annual ISA top-up
£20,000
⚠️
GIA investments are subject to capital risk and returns are not guaranteed. CGT is triggered only on disposal (crystallisation of gains) — holding investments and not selling defers the tax liability. Annual CGT allowance (£3,000) means first £3,000 of gains is always tax-free. Speak to a regulated adviser before proceeding.
RL360 Withdrawal Zones — Garth's Specific Position
Fixed income £28,632 already in place
Zone 1 · N/A
£0 RL360
PA already used. Cannot access tax-free band via RL360.
Zone 2 · 20% — Efficient
£1 – £21,638 from RL360
Total £28,632–£50,270. Basic rate only. Draw here first.
Zone 3 · 40% — Consider Carefully
£21,639 – £71,368 from RL360
Total £50,271–£100,000. Higher rate — tax-heavy but safe.
Zone 4 · ~60% — AVOID
£71,369 – £96,508 from RL360
Total £100,001–£125,140. PA taper — worst zone. Skip or stay below.
Tax-Free Lump Sum & CGT Investment Strategy
Crystallising pension benefits and investing outside the pension wrapper
TFLS Entitlement
RL360 PM10005746 · Value £1,673,001
✅
Tax-Free Lump Sum
£268,275
25% = £418,250 — capped at the Lump Sum Allowance of £268,275. Completely free of income tax.
📋
Remaining Taxable Fund
£1,404,726
Drawn as income and subject to income tax — plan withdrawals to stay in efficient bands.
⚠️
The £268,275 LSA is a lifetime cap across all pensions. Confirm with RL360 and your adviser that no previous tax-free cash has been taken. The RL360 PIMS is a life assurance bond — specific crystallisation rules may differ from a UK SIPP.
General Investment Account (GIA)
CGT vs income tax · the key advantage
📈
Invest £268,275 in a GIA
£268,275
Growth and gains taxed at CGT rates — not income tax. Critical advantage when marginal income tax is 40%.
CGT annual allowance£3,000 free
CGT rate (higher rate taxpayer)24%
Income tax equivalent (higher)40%
Tax saving per £10k gain£1,600 saved
GIA income doesn't affect PA✓ Confirmed
No impact on 60% trap✓ Confirmed
CGT Calculator
Annual gains from GIA investment
Annual Capital Gain
£20,000
£0£100,000
CGT Allowance
£3,000
Tax-free
Taxable Gain
£17,000
CGT @ 24%
£4,080
Net After CGT
£15,920
💡
Pension income at 40% on £20k = £8,000 tax. CGT at 24% = £4,080. Saving: £3,920
ISA Drip-Feed Strategy
Building a permanently tax-free income wrapper
🏦
Year 1
Take TFLS £268,275 tax-free. Put £20,000 straight into ISA. Invest remainder (£248,275) into GIA.
📅
Years 2–13
Move £20,000/yr from GIA → ISA each April. After 13 years, up to £260,000 is in the ISA tax-free wrapper.
🏆
Year 14+
ISA income and growth is permanently tax-free. Not counted in personal allowance calculations. No CGT.
✅
A fully-sheltered ISA of ~£260,000 at 5% yield generates approximately £13,000/yr tax-free — completely outside the tax system, with no effect on the 60% trap threshold or personal allowance.
RL360 Drawdown Planner
Year-by-year projections including estimated tax liability on withdrawals
Annual RL360 Drawdown
£100,000
£0£200,000
Real Growth Rate
3.88%
0%6%
Fund at Age 90
£627,463
Fund at Age 95
£218,766
Fund at Age 100
-£275,698
Tax on RL360 (yr1)
£27,432
Approx income tax
| Yr | Age | Opening | Growth | Drawn | Closing | Tax on RL360 | Net in Pocket |
|---|
RL360 Portfolio Holdings
Policy PM10005746 · Snapshot 20 February 2026
Total Value
£1,673,001
Linked Investments
£1,634,019
97.67%
Cash (GBP+USD)
£38,982
Unrealised Gains
+£312,298
All Holdings
As at 20 Feb 2026
| Holding | Invested | Value | Gain/Loss | Return |
|---|---|---|---|---|
Amundi Smart Overnight Return ETF GBP LU1230136894 | £183,982 | £212,819 | +£28,838 | +15.7% |
Berkshire Hathaway Inc Class B US0846707026 | £22,160 | £22,870 | +£698 | +3.1% |
BlackRock Emerging Markets Fund D Inc GB00B88T6625 | £35,000 | £34,879 | -£121 | -0.3% |
Brandes European Value Fund I GBP Acc IE0031575057 | £115,000 | £126,738 | +£11,738 | +10.2% |
Fidelity Funds Global Healthcare W Acc LU1033663300 | £53,000 | £67,875 | +£14,875 | +28.1% |
Fidelity UK Smaller Companies W Acc GB00B7VNMB18 | £32,000 | £34,651 | +£2,651 | +8.3% |
Guinness Global Equity Income Fund C Inc IE00B3PB1722 | £100,000 | £213,146 | +£113,146 | +113.1% |
Guinness Multi-Asset Balanced C Acc IE00BG5QQV79 | £72,000 | £99,822 | +£27,822 | +38.6% |
JPMorgan Equity Premium Income ETF US46641Q3323 | £39,009 | £38,189 | -£842 | -2.2% |
Morgan Stanley Capital Protected S&P500 2028 XS2424815699 | £157,620 | £204,389 | +£46,681 | +29.6% |
NatWest Group plc Ord GB00BM8PJY71 | £20,001 | £23,448 | +£3,448 | +17.2% |
ORBIS Global Equity Fund Standard Acc GB00BJ02KW01 | £160,000 | £180,064 | +£20,064 | +12.5% |
Schroder QEP Global Core A Acc GB00B5310487 | £25,000 | £28,851 | +£3,851 | +15.4% |
iShares MSCI World GBP Hedged IE00B42YS929 | £106,950 | £146,587 | +£39,637 | +37.1% |
iShares iBonds Dec 2028 Term Corp ETF IE000VVQWC23 | £199,999 | £199,691 | -£309 | -0.2% |
| TOTAL LINKED | £1,321,721 | £1,634,019 | +£312,298 | +23.6% |
Important Disclaimer: This document is prepared for information purposes only and does not constitute regulated financial advice. All tax calculations use 2025/26 HMRC rates and are illustrative estimates only. Garth's actual position depends on full individual circumstances. The RL360 PIMS is a life assurance bond — specific crystallisation, TFLS and drawdown rules may differ from a UK SIPP; specialist advice is essential before any pension crystallisation. Previous TFLS history must be confirmed with RL360. Investment values can fall as well as rise and capital is at risk. CGT/ISA strategies are subject to legislative change. Seek regulated advice before proceeding.
RL360 · PM10005746 · Sovereign Pensions Ltd · Prepared by AFG · March 2026
RL360 · PM10005746 · Sovereign Pensions Ltd · Prepared by AFG · March 2026