25% tax free multiple pensions and still contributing

[petergibbinson]

Hypothetical - 2 pensions (both SIPPS)... (a) 400k (b) 200k - I am contributing 20k on a regular basis (annually) from income.

scenario 1
I want to take 25% tax free from pension (a) (so 100K) at age 55 - 300k goes into drawdown (which I don't touch)
Pension (b) I continue to contribute 20k per year - I leave for 10 years and its now worth 300k and I then take 25% i.e 75k tax free (and 225k goes into drawdown)
MPAA isn't restricted to 10k as I have only taken the tax free lump sum

I believe the above is correct?

scenario 2
What happens if instead I take 25% tax free (100k) from (a) so 300k in drawdown - but continue to contribute 20k into that pension. That 300k grows to 600k after 10 years... do I then get to withdraw 25% tax free again from the 300k (so 75k tax free) (that's the amount above the initial amount in drawdown?)

If scenario 2 isn't the case then obviously contributing to untouched sipp (b) makes more sense as I still get the increased 25% tax free on the additional growth and contributions.

[ben_power]

As long as the MPAA isn't triggered and you have sufficient relevant earnings from your income then both scenario 1 and 2 apply.

If you fully crystallise funds from either of the SIPPs but then make further contributions to that same SIPP, you are simply building an uncrystallised portion of the pension which will again offer the potential for 25% TFC (subject to the LSA)

Why you have separate SIPPs raises questions and so does the concept of switching contributions from one to the other as well as discounting a possible workplace pension which could benefit from salary sacrifice but.... we're talking hypotheticals here so it's irrelevant.