A major mistake people make is leaving the money they pay into a pension to be managed by someone else. For those Bitcoiners in the UK who already have money in a pension the best option is to use it to buy actual Bitcoin (and self-custody it). At least that way your pension is held in the best-performing asset.

At retirement age, whether to drawdown all in a single lump-sum or over time as an income would depend on personal circumstances and preferences. One major advantage of pensions currently is that gains are free from capital gains tax (at least for now, I would not be surprised if the gov changed that). For this reason I imagine drawing down as needed would be the better option rather than taking it all as a lump sum, incurring income tax, then having capital gains due on any Bitcoin you bought with it. Just let the Bitcoin appreciate without capital gains, then take out whatever each year, maximising your annual personal allowance and possibly avoiding higher income tax brackets.

As far as paying more into a pension post-orange-pilling, as you say, stacking self-sovereign sats seems like a better option. However, this is often complicated slightly by the fact you'd typically lose out on the employer contribution if you don't make contributions of your own.

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Agreed, except the “free of CGT”, the payout was taxed at source at 24% CGT, that was a significant reason the pension didn’t perform.

Tax free pensions, refer to the input, not the output tax.

Be very careful of this, Pensions are NOT tax free.

In the UK at least you may get tax reductions for paying in but, as you say, when drawing down your pension it is all subject to income tax (except the 25% tax-free lump sum, up to a limit of £268,275).

Gains in most pensions are free from CGT though:

> The disposal of an investment held for the purposes of a registered pension scheme is not a chargeable gain. It is therefore exempt from capital gains tax.

There are some exemptions for atypical situations, such as overseas pensions schemes, which may explain having to pay CGT.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg67650

I'm not going to declare the actual numbers, but this is the actual reality.

My wife contributed £0.45p

The employer contributed £0.45p

At maturity, after 25 years, the pension pot was £1

After tax, we received £0.76p

The amount was not even close to £268,275.

Pension pot: £1

25% tax-free lump sum: £0.25

Higher income tax of 40% on remaining £0.75: £0.30

Pension pot after income tax: £0.25 + £0.75 - £0.30 = £0.70

Effective tax rate: 30%

This would be reduced a bit if taking into account personal allowance. For example if the pension pot was £100k and the personal allowance £12,500 the effective tax rate would be 25%.

Thanks, that clears it up 🫡