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Drawdown logistics

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Comments

  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    edited 19 December 2009 at 2:06PM
    Could I inquire why rebate of trail commission is so important to you? At typically 0.5% it would be quickly outstripped by the fees inherent in the methods you are suggesting to get it rebated.And it shouldn't be an issue with ETFs at all. :confused:

    Also, what exactly do you understand by the term 'phased retirement'?
    Trying to keep it simple...;)
  • dxt_2
    dxt_2 Posts: 13 Forumite
    You are right it should not be an issue with ETFs and indeed I did say that they were my chosen route. Its just that it seems sensible to plan such that, if at some later point I wanted to use OIECs in the fund, I could do so knowing that the 0.5% was either coming back to me, or going to an adviser, and was not simply adding to the plan provider's margin (as happened with my ISAs for many years before I understood how it was working). Its a small but not entirely insignificant consideration, however if I have made suggestions that lose more by costs than I save - only to achieve that end - I have clearly made an error.

    By phased retirement I understand a method of vesting that divides the fund into segments that are invested progressively. Rather than taking the tax free lump sum in one initial amount, the benefits each year of the drawdown combine a tax free and a taxed element. This will suit my tax affairs better as well as leaving the remaining tax free lump sum to grow within a tax free environment for longer, since I would otherwise be investing it in a normal taxed environment. That is not an exact definition, have I understood it right?
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    edited 21 December 2009 at 3:24PM
    dxt wrote: »
    You are right it should not be an issue with ETFs and indeed I did say that they were my chosen route. Its just that it seems sensible to plan such that, if at some later point I wanted to use OIECs in the fund, I could do so knowing that the 0.5% was either coming back to me, or going to an adviser, and was not simply adding to the plan provider's margin....

    If this however 'came back to you' in the form of no - or very low -charges for the SIPP wrapper, perhaps it would be acceptable?

    Your understanding of phased retirement is correct.This is available in the Sippdeal drawdown SIPP AFAIK.

    I can't see why the Sippdeal plain vailla account wouln't suit you

    -Offers phased retirement
    -Offers ETFs at low trading cost
    -£75 annual drawdown fee includes income payments and GAD review, no other fees after set-up
    -No IFA involved
    -Other investment options - shares gilts,ITs,UTs etc
    (excluding commercial property, external cash accounts)
    -Full online control by investor

    That's assuming you are happy to choose and tweak your basket of ETFs yourself.
    Trying to keep it simple...;)
  • dxt_2
    dxt_2 Posts: 13 Forumite
    EdInvestor wrote: »
    If this however 'came back to you' in the form of no - or very low -charges for the SIPP wrapper, perhaps it would be acceptable?

    It would depend on how much was at stake. If I had several hundred thousand pounds in OEICs and no adviser and the SIPP wrap was being paid by annual fees, the value of that .5% would be from my viewpoint significant and wasted. I know I am being contradictory since my aim in the first instance is to use ETF vehicles. Just hoping to cover all possible bases, and maybe this is not going to be possible.

    Sippdeal per your posting does have the virtues of simplicity and economy I agree and might even (per a good phonecall with someone more knowledgeable than I spoke with before) offer all the investments I want. I have opened a SIPP with them - only with the intention at this stage of actually exploring the interface and hard-reality of the offered investments. If these plans offered 'virtual' portfolio sandpit areas it would be useful in making a decision I must say.

    Anyway thank you for your input. I do not nead to crystallise my fund at any particular time point and am going to take some time to make a decision.
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