The order money is drawn, in more detail

The sum to cover is the year’s spending and tax, less money already coming in: earnings, the State Pension, guaranteed income, money from a one-off and any scheme lump sum. Planned tax-free cash comes off that too. Tax is worked out again after each pension draw, gains tax included, and any rise is drawn in the same order.

• Pots of one type are drawn in the order you added them.
• A pension is drawn only once its owner reaches their Earliest drawing age.
• Between two of you, pension draws go in portions to whoever has the lower income, so both people’s allowances and bands are used together. A fixed order shares draws the same way.
• A draw from the taxable account sells part of it, and the gain on that part meets capital gains tax. Enough is sold to meet the need after that tax.

After the last pot in either order comes the emergency fund. Anything still unmet is that year’s shortfall.

A year with more coming in than going out saves the difference. A scheme’s lump sum goes first to the pot it names. Then bank savings are topped up to the emergency fund. The rest follows “Where a surplus is invested” in Edit plan, with up to one ISA allowance for each of you.