Income Strategy — China Living

From January 2027  ·  China living cost ~£500/month  ·  All figures monthly

Income sources
🏠
House rental income
Net after costs — joint names, tax-free for both
CONFIRMED
£1,200
🇬🇧
Government pension
Starts 07 Jan 2027 — can defer to build up
DEFERRABLE
£1,000
📈
H&L SIPP drawdown
Taxable above personal allowance — draw as needed
OPTIONAL
£200
🔒
Aviva pension drawdown
Both unlock Aug 2027 — estimated monthly draw
OPTIONAL
£200
💼
ISA drawdown
Completely tax-free — no limit, no HMRC reporting
OPTIONAL · TAX FREE
£150
🍜
China living costs
All-in monthly spend estimate
NEED
£500
🏠 Joint ownership — both personal allowances apply: Rental split 50/50 = £7,200 each/year. Both within £12,570 personal allowance. No other UK income while in China. Tax = £0 for both of you.
Rental alone vs all sources combined
Rental only
£1,200
£1,200
+ Gov pension
£2,200
£2,200
+ All drawdowns
£2,200 confirmed + £550 optional
£2,750
China cost
£500
£500

Strategy options

✓ Chosen Plan — Option A
Rental only — everything else grows
House rental (joint — tax-free)£1,200
Gov pensionDeferred ↑
SIPP / Aviva / ISAUntouched ↑
China costs−£500
Monthly surplus
£700
Plan: up to 2 years in China, then return to UK to reevaluate. Pension deferred — grows to ~£1,119/mo after 2 yrs. Aligns with wife's ILR 2-year limit. Rental tax-free — split 50/50, both within personal allowance.
Option B
Rental + selective drawdowns — defer pension
House rental£1,200
Gov pensionDeferred ↑
ISA draw (tax-free)£150
SIPP draw£200
China costs−£500
Monthly surplus
£1,050
Good cash flow. Pension deferred — grows at ~5.8%/yr. ISA draw is tax-free. SIPP draw likely within personal allowance.
Option C
Take everything — maximum income
House rental£1,200
Gov pension£1,000
SIPP + Aviva + ISA£550
China costs−£500
Monthly surplus
£2,250
Maximum monthly cash. Nothing compounds. Aviva still locked until Aug 2027. Tax implications once pension + SIPP exceed personal allowance.
The 2-year China plan — what compounds while you're away
Gov pension after 2yr deferral
£1,119/mo
+£119/mo locked in for life
H&L SIPP (est. at 6%/yr)
~£45,500
from ~£40,500 today
ISA (est. at 6%/yr)
~£37,100
from ~£33,000 today
Aviva (unlocks Aug 2027)
£86,100+
Review on return to UK
On return to UK (late 2028 / early 2029): pension £1,119/mo + rental or own home + Aviva options available + all drawdown pots larger. Full reevaluation then.
⚠ Wife's ILR: must return to UK within 2 years of leaving — plan aligns.
Gov pension deferral — what it grows to (grows ~5.8%/yr)
Take Jan 2027
£1,000/mo
No deferral
Defer 1 year
£1,058/mo
+£58/mo forever
Defer 2 years
£1,119/mo
+£119/mo forever
Defer 3 years
£1,184/mo
+£184/mo forever
Defer 4 years
£1,252/mo
+£252/mo forever

While deferred, you live off rental + drawdowns. Rental alone (£1,200) covers China costs (£500) with £700 to spare. Every year you wait locks in a higher pension for life.