Any disadvantage taking multiple tax free amounts from SIPP with Flexi drawdown

justintime99

I have £200k in SIPP with ii.  I do not need to take the full 25% tax free lump sum initially, but I am concerned taking say 2x 12.5% lump sums may be detrimental. The concern arose when ii said I do not need to sell any funds moving into drawdown - so it appears if SIPP & drawdown investments are not segregated.
Here is a scenario that explains my concern (an optimist 10% growth pa assumed)
1. SIPP is £200k and take £25k tax free which moves £75k into flexi drawdown. Leaving £100k in the SIPP. So I have taken 50% of my tax free allowance
2. take £10k each year for say 3 years so flexidrawn is now £63.4k. The SIPP part would have grown to £133.1k. But as the investments not segregated the individual figures would not be known.
3 I now want to take the rest of the tax free cash. My calculation is 
- Total fund (SIPP + draw) is £196.5k. So 50% of that is £98.25k, giving a tax free lump sum of £24.6k
Which is disappointing because If the SIPP funds were segregated the tax free lump sum would be 25% of £133.1k = £33.3k 

zagfles

Your calculations are wrong, it'll make no difference whether segregated or not.

After 1. before growth you'll have 57.1% uncrystallised, not 50%. 100/175.

If you take out taxed income, that'll increase the uncrystallised % more, as you're reducing the crystallised part.

Albermarle

The % figure mentioned will be visible to you on the ii website .

justintime99

zagfles said:

Your calculations are wrong, it'll make no difference whether segregated or not.

After 1. before growth you'll have 57.1% uncrystallised, not 50%. 100/175.

If you take out taxed income, that'll increase the uncrystallised % more, as you're reducing the crystallised part.

Thanks. I was hoping I was wrong!