drawdown info

shiredeon

I know this may sound a bit stupid but as my company will continue to pay into a sipp after i've gone to france, i'm not sure how drawdown works.

I will be starting a new sipp as i cannot add more to the one i've transferred my EPP into as it's been vested, am i right in thinking that you have to invest in yield bearing funds or shares that pay dividends.

I dont see how you could take an income from growth shares or do you have to sell them bit by bit to create the income.? thanks.

EdInvestor

am i right in thinking that you have to invest in yield bearing funds or shares that pay dividends.I dont see how you could take an income from growth shares or do you have to sell them bit by bit to create the income.

You can do either (or both) Obviously it's cheaper to invest in shares or funds that pay income as you will not incur extra fees for selling units to provide the cash to pay the income.

It's also easier IMHO to keep track of the state of your money if the capital and the income are mostly separate and clearly so.That way, if there is a big market downturn and your capital goes down, you can clearly see you shouldn't draw extra from the fund above the natural income for a while, to allow it to recover.