SIPP - income

hkg888

Hi

I am planning to take an income from my SIPP. currently all investments are in accumulation units of various funds. The question is
:

Should I sell units or convert the accum. Units to cash (distribution) units in order to generate the income amount? There is no charge to convert in my current SIPP.

THanks in advance for any advice.

dunstonh

Should I sell units or convert the accum. Units to cash (distribution) units in order to generate the income amount?

Depends on how you are structuring your withdrawals. There are multiple ways to do this. So, what you should do should reflect the method you are using. So, how are you funding your withdrawals? natural income, capital and growth as well as income, cash fund holding £x to cover the next y number of years.....

Linton

There are different ways of taking money from a SIPP. One way is to focus on income generating investments and take some or all of the natural income. Another is to predefine %s of cash, safer investments, and long term investments. Take some or all of the cash annually and rebalance. I personally use both strategies in different portfolios, though the income generating investment strategy is run from an S&S ISA.

So the answer to your question is that you are asking the wrong question. The first question to answer is "What is my income strategy?".

Loughton_Monkey

Of all the points I consider in my own pension, the question of accumulation (cf income) units comes right at the bottom of the list.

As it happens, I virtually always use accumulation since I want the maximum amount of 'time in investment' for my money. In the short term, the difference is very minimal.

When I want to make a drawdown, I will make my own decision on which (acc) units to sell and then drawdown the cash.