New Pension Rules

gadgetmind

Well, if both BestInvest and FriendsLife will allow UFPLS, it will be something I could consider.

My plan was to grab max PCLS from everywhere, invest in wife's name to generate dividend income, and then slowly ISA-up everything.

It's a difficult call, but I can see advantages to not crystalizing until necessary to avoid nasty tax issues when first of us pops our clogs. (Nasty because all income would switch to one person, hence loads of HR tax.)

kidmugsy

BazzerPontefract wrote: »

As far as I can make out, I'd have to pay a one off SIPP set up fee, an annual admin charge, and a drawdown transaction charge. There's the fund 1.475% charge too, but I've always viewed this as reasonable..

(i) If there is a SIPP set-up fee: I didn't pay one at Hargreaves Lansdown.

(ii) 1.475%!!?? We take different views on "reasonable".

Consider:

http://monevator.com/cheapest-pension-diy/

and

http://monevator.com/vanguards-cheap-trackers-lower-charges/

SomeUser

The most important thing (IMO) about the UFPLS is that it doesn't trigger the reduced £10,000 annual allowance.

Edit - well, not in the currently draft guidance. (If you read the guidance, don't waste your time with the hybrid calcs. HMRC admitted to us they didn't understand them either but that the DWP had said they do what they are supposed to).

gadgetmind

SomeUser wrote: »

The most important thing (IMO) about the UFPLS is that it doesn't trigger the reduced £10,000 annual allowance.

The AJ Bell document says "Taking any UFPLS will trigger the MPAA."

SomeUser

gadgetmind wrote: »

The AJ Bell document says "Taking any UFPLS will trigger the MPAA."

Sorry, you're right. It's been a long week!

Taking the 25% and transferring the rest to a flexi access drawdown, won't trigger the AA. Not until you draw the benefits from the FAD. (whereas you will if you take the UFPLS).

SomeUser

There's still a lot to be worked out. The guidance is still in draft.

There's been good suggestions on the death benefits in the feedback which we hope the DWP will take on board

It's still unclear where there are DB and DC benefits in the same scheme (i.e. commutation/trivial commutation) and what is defined as DC benefits (such as where AVCs have bought additional pension).

Thrugelmir

BazzerPontefract wrote: »

There's the fund 1.475% charge too, but I've always viewed this as reasonable.

I happily self manage my SIPP for £114 a year. I would baulk at paying out fees of over £45k over a 10 year period.

greenglide

Thrugelmir wrote: »

I happily self manage my SIPP for £114 a year. I would baulk at paying out fees of over £45k over a 10 year period.

.... but it is not everyone who feels confident enough and is able to this.

Do you service your own car? You pay? I always used to do mine (I enjoyed it and saved money:) ) but pay a garage now as pension age approaches!

We cannot all do everything and realising when we can't do something is key. Investments done wrong can lose a great deal of money!

Thrugelmir

greenglide wrote: »

.... but it is not everyone who feels confident enough and is able to this.

I do invest a considerable amount of personal time. So while my comment may have appeared to be flippant there was another aspect. I built my funds on the back of IT's. At a point I thought why not hold the shares directly.

cinderfella

A thought has just crossed my mind. If someone is an expat & say is going for the 5 year rule for CGT as a non resident would messing with a pension pot interrupt the rule & make the person resident for the year of pension withdrawal. It seems to me that when you are given a tax personal allowance you are deemed to have earned in that year. If you are deemed to have earned £10000 (the tax allowance) the R & C would view you as a resident for that year. So down the pan would go your entitlement to not being taxed for CGT due to a consecutive 5 years of apparent non residence.