UFPLS vs Flexi access for my circumstances

Gallygirl_2

I have read through the various posts regarding the above and I believe which method to use in drawdown depends on an individuals circumstances. I still cannot decide which is best for me and I hope someone can explain it to me . Before I am shot down, I did post this question a year ago but I still feel as uncertain ( am I missing a trick as the event gets nearer) and the replies either involved taking out more than the natural yield would produce even if below the PA (I would prefer not to sell funds) or went off on a tangent.


I am over 55 and would like to retire next year. I have a SIPP worth approx £300000 and an ISA worth £250000 with Interactive Investor. I have no other pensions or investments. My hope is to live off the income/dividends from the funds I have in the SIPP and ISA. Assuming a rate of between 3-4% for dividends, hopefully the SIPP will produce between £9000 - £12000 a year and the ISA £7500 -£10,000.


If I have no other income withdrawing the 9- 12K from the SIPP will not attract any income tax and the same for the 7.5-10K from the ISA. I plan to do this until SP kicks in then reduce what I take from the SIPP.


Interactive investor charge £120 a year for flexi access drawdown (FAD) and £50+vat for each UFPLS withdrawal. I do not need a lump sum for any one off big payments.



What would be the best method for me in drawdown?

Jerben

I'm in a similar situation and this question has been on my mind recently, as I might 'press the button' next year too.
In fact I've created a 'planning spreadsheet' for myself this week!
I'm assuming you plan to 'need' about £20k 'income'? (Taking a mid range from your numbers).
My current plan uses one UFPLS per year, as it seems cheaper, (in April/May).
I will take at least the PA + tax free element from the SIPP (currently £16666).
This is to fully use my personal allowance, before SP starts.
I might even take £20266, (£16666 + £3600) from the SIPP and then put £2880 back into the SIPP?

zagfles

If you're not drawing enough income from the SIPP to use up the PA, you could sell in the SIPP and rebuy the same funds in the ISA, that might be more tax efficient. Also inheritance issues will play a major part in the decision of whether it's best to fully crystallise and drawdown, or partially crystallise, or use UFPLSs.

Albermarle

My current plan uses one UFPLS per year, as it seems cheaper, (in April/May)

Every SIPP has a slightly different charging regime , so this will not be the case for everybody. In fact some do not charge at all , but they will charge a higher overall service charge for example.

Dazed_and_confused

I might even take £20266, (£16666 + £3600) from the SIPP and then put £2880 back into the SIPP?

Out of curiousity why £16666 + £3600 and not £16666 + £2880?