Another FAD v UFPLS question . . .

shinytop

It depends on your provider and from reading here there are different methods used. You tell your provider you want £80k. Your provider will either tag £60k as crystallised as you suggest (leaving it invested as it is until you tell them different) or will move it into a different (i.e. crystallised) account. I don't think it ever ends up in cash unless you want it to. The £20k will be put in a cash account after which you are free to spend or re-invest (e.g. in an ISA).

I haven't actuall done this yet so someone who has may correct me. However I have just initiated this process for my 2 SIPPs, one who uses the tagging method and one who uses a different account. I will be able to report back some real experience in a few weeks.:)

jamesd

You take benefits from ("declare") 80k. 25% tax free provides the ISA money and the remaining 60 goes into a flexi-access drawdown account to be taken in any taxable amount whenever you like.

You'll probably be required to choose which 80k worth to sell to get 80k uninvested cash within the pension and which to rebuy in ISA and drawdown accounts. The 20k will probably be paid into whatever bank account you specify, then you can use it to subscribe to whatever ISA you like.

Probably is there because some places keep the two parts together in one account.