Drawdown pension: how do I actually get the cash when I need it?

SabNys

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I have investigated all the available pension options. I'm now 99% likely to use "Take 25% tax-free, then buy a flexible income drawdown product" - as described in "Guide to taking your pension 2016" (Written by Martin Lewis, Amy Roberts and Johanna Gornitzki), from this site.

I have no need for income from any pension option, because I already have sufficient other sources.

I only want to take annual lump sums that keep me just inside my normal tax bracket, and give them to my kids to help them up the property ladder.

<<Edited. The following question was my original question. It assumes that all the initial IFA discussions, form-filling, ID, signatures, etc are complete. I think all the generous responders have assumed that none of this was done. Sorry about that. In my own defence, I can at least say that the following question applies to the process "after I get the 25% lump sum">>

Question: What's the normal procedure after I get the 25% lump sum? In other words, how do I actually get further annual lump sums? Do I simply write to someone-or-other, and get an immediate bank transfer? Or will there be dozens of forms which will take months to complete?

I'm sorry for the rather unusual question. I've researched a lot of very useful and respected sites (including this site, and the excellent Which? Magazine). But none of them tell me how to actually get my grubby hands on the cash and give it to my kids before I kick the bucket :-)

Thanks.
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xylophone

It will depend on how drawdown is offered by the scheme you choose.Example here http://www.hl.co.uk/pensions/drawdown

maximumgardener

Broadly you have two routes - DIY or via an IFA appointed by you.

DIY great if you want to do that all & manage it all.

The IFA route has costs which you need to discuss and basically they set everything up for you with the drawdown arrangement that you want. you will need to fill some forms in and sign and provide ID etc etc but they set everything up . often this may be done with a Fund supermarket e.g. Fidelity Funds network or HL or other choices are available.

you then get a payment every month normally from your invested accounts.

you get online access so you can see transactions etc......excellent system

you can also vary payments to suit your needs ...just request that via your IFA


good luck!!

dunstonh

I'm now 99% likely to use "Take 25% tax-free, then buy a flexible income drawdown product"

Actually, that is the least common method. The most common is to buy a flexible drawdown product and then take the 25% tax free. There is a difference.

Question: What's the normal procedure after I get the 25% lump sum? In other words, how do I actually get further annual lump sums? Do I simply write to someone-or-other, and get an immediate bank transfer? Or will there be dozens of forms which will take months to complete?

Will you be using flexi-access drawdown or phased flexi-access drawdown?

Admin and paperwork will vary with providers. Some will be paperless. Some will require a single form. Some will have longer forms.

SabNys

xylophone wrote: »

It will depend on how drawdown is offered by the scheme you choose.Example here <URL removed>

Thanks for your response. I downloaded the HL guide to drawdown. Unfortunately, it does not answer my question, which was:

>> how do I actually get further annual lump sums? Do I simply write to someone-or-other, and get an immediate bank transfer? Or will there be dozens of forms which will take months to complete?

coyrls

SabNys wrote: »

Thanks for your response. I downloaded the HL guide to drawdown. Unfortunately, it does not answer my question, which was:

>> how do I actually get further annual lump sums? Do I simply write to someone-or-other, and get an immediate bank transfer? Or will there be dozens of forms which will take months to complete?

It depends on the platform that you hold the SIPP on. If you are researching platforms then ease of requesting ad-hoc payments should be one of your criteria. If it's not clear from the platform's website, then you will have to ring and ask.

SabNys

maximumgardener wrote: »

Broadly you have two routes - DIY or via an IFA appointed by you.

DIY great if you want to do that all & manage it all.

The IFA route has costs which you need to discuss and basically they set everything up for you with the drawdown arrangement that you want. you will need to fill some forms in and sign and provide ID etc etc but they set everything up . often this may be done with a Fund supermarket e.g. Fidelity Funds network or HL or other choices are available.

Thanks for your response. It looks as if most of your comments are redundant - probably due to my badly worded post - which has now been edited. It's embarrassing for my first post to go all wrong.

maximumgardener wrote: »

you then get a payment every month normally from your invested accounts.

As I mentioned in my OP, I don't require income - only lump sums annually. Or perhaps several lump sums which keep me within my normal tax bracket.

My OP relates to how much difficulty and hassle is involved for each individual lump sum.

xylophone

how do I actually get further annual lump sums? Do I simply write to someone-or-other, and get an immediate bank transfer? Or will there be dozens of forms which will take months to complete?

You request HL to make the payment(s) as required.

See http://www.hl.co.uk/pensions/drawdown/faqs


The usual payment date is 28th of each month - you need to give notice of at least ten working days.

If you are interested in HL, give them a ring - the staff are helpful and knowledgeable.

maximumgardener

SabNys wrote: »

.
I have investigated all the available pension options. I'm now 99% likely to use "Take 25% tax-free, then buy a flexible income drawdown product" - as described in "Guide to taking your pension 2016" (Written by Martin Lewis, Amy Roberts and Johanna Gornitzki), from this site.

I have no need for income from any pension option, because I already have sufficient other sources.

I only want to take annual lump sums that keep me just inside my normal tax bracket, and give them to my kids to help them up the property ladder.

<<Edited. The following question was my original question. It assumes that all the initial IFA discussions, form-filling, ID, signatures, etc are complete. I think all the generous responders have assumed that none of this was done. Sorry about that. In my own defence, I can at least say that the following question applies to the process "after I get the 25% lump sum">>

Question: What's the normal procedure after I get the 25% lump sum? In other words, how do I actually get further annual lump sums? Do I simply write to someone-or-other, and get an immediate bank transfer? Or will there be dozens of forms which will take months to complete?

I'm sorry for the rather unusual question. I've researched a lot of very useful and respected sites (including this site, and the excellent Which? Magazine). But none of them tell me how to actually get my grubby hands on the cash and give it to my kids before I kick the bucket :-)
Thanks.
.

so.......the answer to your question is you just discuss your requirements with your IFA/pension providers. Its your money , right? tell them what you want to happen and they should be able to make it happen and explain options. If you want an annual payment then I am sure they can do that even though monthly is more normal as it eases the tax management with HMRC

one option that springs to mind is you may be in a position to take tax out of the equation by using ISA funds for your drawdown amounts.

xylophone mentioned HL . they are very good at explaining how these things work for you.
we don't really know what exactly you have already set up but it sounds as if you have IFA in place etc?

SabNys

maximumgardener wrote: »

monthly is more normal as it eases the tax management with HMRC

That sounds fine. I've been using terms such as "annual payments" and "lump sums" and "ad hoc" to draw a clear distinction with "regular income" - as in an annuity.

I have more than enough "income" from other sources to need anything from my pension. I just want to grab the loot and run.

maximumgardener wrote: »

one option that springs to mind is you may be in a position to take tax out of the equation by using ISA funds for your drawdown amounts.

That sounds most interesting.

maximumgardener wrote: »

xylophone mentioned HL . they are very good at explaining how these things work for you.

I'm assuming that because this is Martin Lewis's site, then neither you nor xylophone work for HL :-)

I downloaded everything from the H&L site weeks ago, as part of my research.

maximumgardener wrote: »

we don't really know what exactly you have already set up but it sounds as if you have IFA in place etc?

Good question. I thought I had an IFA in place.

I've known my "IFA" for many years. His original employers put me in touch with the holders of my current pension pot. Presumably he got his fee from the pot holder. I assumed that he was now helping me to chose the best "provider". In fact, he sent me a glossy "proposal" package a week or so ago, describing SJP as if it were already a done deal. The address at the top of his own letter to me was St James Place. So, he's an employee, not an "independent" financial adviser :-(

Just after receiving the proposal by post, I started googling SJP. I found several unflattering news articles. I'm not allowed to post links yet, but on ukmoneysite I found:

- We recently reviewed 32 funds in our St James Place investment fund review and found 68% of the total money invested with St James Place is held in poor performing funds.

So, that was the reason for my OP - I want to start looking around.

BTW: my "IFA" has never mentioned any fees, so I assumed that he would get his fee from whomever he finally recommended to me. And we now know who that is :-)

dunstonh

BTW: my "IFA" has never mentioned any fees, so I assumed that he would get his fee from whomever he finally recommended to me. And we now know who that is :-)

He is not an IFA. He is a sales rep of SJP. SJP sell their own product and he is paid out of the charges. He isnt fee based. IFAs have to be fee based. They cannot receive commissions.

If he has told you that he was an IFA then he has misrepresented his position and that is something you should complain about. SJP are one of the most expensive distribution channels out there.