How much DD and when & 25% Tax Fee

Albermarle

The previous poster already said that HL , will not process regular monthly drawdown payments that are part tax free and part taxable . The only way to do this is to have a series of UFPLS payments , which require a separate application/paperwork every time , so very unwieldy.
I recall another poster having the same problem with another platform .

cfw1994

Nick9967 said:

The more this post goes on the more I'm convinced that i need a professional to take care of my "best plan", there's a huge difference between those variations , tax etc 
Thanks all for your time seems i have lots to learn!

I think the trick is to speak with your pension provider, not just ask here.   Different providers will have different rules.   I had asked some similar questions about varying drawdowns to mine: turns out if I want to increase the number I have to speak with them and fill in a form, but to reduce it only needs a call.
Either way it is just admin.   Of course you can pay someone to do that admin for you, or you can just do it yourself.   Doesn't feel overly complex.
You do need to be clear on where you can take the 25% TFLS - either up front, or as part of each withdrawal, and again, you ought to check your provider will allow either.   
Have you spoken with anyone from PensionWise?   You can have a free hour with them, & I imagine they would be able to clarify that to you.  They do not give advice (like an internet forum, eh!!), but will clearly run through what options you have: worthwhile, I would suggest.

squirrelpie

zagfles said:

squirrelpie said:

zagfles said:

There are loads of ways of essentially achieving the same thing, some are easier admin wise with some providers but harder with others and vv. But most will offer the same basic options. Full drawdown, phased drawdown, or UFPLS.

Do you know if there is a list or table anywhere that identifies what is possible with various providers? Or can you even name any providers that can provide the "each monthly payment would be 25% tax free with 75% taxable" facility that dunstonh suggests?

That's basically a UFPLS every month. So it's doable with any provider that offers UFPLS. How easy the admin would be, I don't know. If it's a hassle, I'd go for periodic phasing as mentioned above, eg crystallise in £100k chunks (or less - perhaps £80k chunks which would make a nice round £20k TFLS which could go into an ISA)

dunstonh was talking about regular drawdown payments, not individual UFPLS needing authorization every month. So can you answer my question?

squirrelpie

dunstonh said:

squirrelpie said:

zagfles said:

There are loads of ways of essentially achieving the same thing, some are easier admin wise with some providers but harder with others and vv. But most will offer the same basic options. Full drawdown, phased drawdown, or UFPLS.

Do you know if there is a list or table anywhere that identifies what is possible with various providers? Or can you even name any providers that can provide the "each monthly payment would be 25% tax free with 75% taxable" facility that dunstonh suggests?

I would expect virtually every provider/platform to do it.

Can you please provide some actual example names?

garmeg

squirrelpie said:

zagfles said:

squirrelpie said:

zagfles said:

There are loads of ways of essentially achieving the same thing, some are easier admin wise with some providers but harder with others and vv. But most will offer the same basic options. Full drawdown, phased drawdown, or UFPLS.

Do you know if there is a list or table anywhere that identifies what is possible with various providers? Or can you even name any providers that can provide the "each monthly payment would be 25% tax free with 75% taxable" facility that dunstonh suggests?

That's basically a UFPLS every month. So it's doable with any provider that offers UFPLS. How easy the admin would be, I don't know. If it's a hassle, I'd go for periodic phasing as mentioned above, eg crystallise in £100k chunks (or less - perhaps £80k chunks which would make a nice round £20k TFLS which could go into an ISA)

dunstonh was talking about regular drawdown payments, not individual UFPLS needing authorization every month. So can you answer my question?

For UFPLS you are crystallising part of your fund each time. Each time uses up a proportion of LTA so I think this needs authorising / confirming each time even if just to confirm that there is enough LTA left to allow the tax free portion.

dunstonh

Can you please provide some actual example names?

I would have a harder job telling you the names of those that do not.  I cannot think of a single one at the moment who does not offer phased drawdown.  I am sure HL will do it.   It is effectively an automated regular UFPLS.

For UFPLS you are crystallising part of your fund each time. Each time uses up a proportion of LTA so I think this needs authorising / confirming each time even if just to confirm that there is enough LTA left to allow the tax free portion.

I can only speak for providers that retail via intermediaries but that is not a problem.  They generate an LTA update either each month (by dropping it in the reports and documents/lettter folder with the online access or update it on each quarterly statement.

garmeg

dunstonh said:

For UFPLS you are crystallising part of your fund each time. Each time uses up a proportion of LTA so I think this needs authorising / confirming each time even if just to confirm that there is enough LTA left to allow the tax free portion.

I can only speak for providers that retail via intermediaries but that is not a problem.  They generate an LTA update either each month (by dropping it in the reports and documents/lettter folder with the online access or update it on each quarterly statement.

But there may be other crystallisations with other providers hence the need for confirmation each time. Of course most people wont have an LTA problem, but you need to allow for those that might. Surely?

Albermarle

I would have a harder job telling you the names of those that do not.  I cannot think of a single one at the moment who does not offer phased drawdown.  I am sure HL will do it.   It is effectively an automated regular UFPLS.

I have done some research .

First my own SIPP ( not HL) and my personal pension do not offer this as far as I can see from all the info.

If you search phased drawdown on google , there are not many specific results but those that do mention it mainly refer to taking out the tax free part in one go for the 12 months. Then taking it from your bank account monthly along with a monthly income from the crystallised part of the pension.

The only company specifically mentioned to offer a monthly drawdown payment of a mixture of tax free cash and taxable income is Aviva, and that was found via their advisor site . Also it is mentioned they are one of the few to offer this facility ( although that comment was a few years ago) 

Maybe the main providers used by advisors offer it, but it does not seem to be readily available in this monthly format for retail customers ?

zagfles

garmeg said:

dunstonh said:

For UFPLS you are crystallising part of your fund each time. Each time uses up a proportion of LTA so I think this needs authorising / confirming each time even if just to confirm that there is enough LTA left to allow the tax free portion.

I can only speak for providers that retail via intermediaries but that is not a problem.  They generate an LTA update either each month (by dropping it in the reports and documents/lettter folder with the online access or update it on each quarterly statement.

But there may be other crystallisations with other providers hence the need for confirmation each time. Of course most people wont have an LTA problem, but you need to allow for those that might. Surely?

As discussed here it looks like they only need to do it annually

https://forums.moneysavingexpert.com/discussion/6175503/what-details-should-be-sent-when-a-bce-occurs/p1

zagfles

Albermarle said:

I would have a harder job telling you the names of those that do not.  I cannot think of a single one at the moment who does not offer phased drawdown.  I am sure HL will do it.   It is effectively an automated regular UFPLS.

I have done some research .

First my own SIPP ( not HL) and my personal pension do not offer this as far as I can see from all the info.

If you search phased drawdown on google , there are not many specific results but those that do mention it mainly refer to taking out the tax free part in one go for the 12 months. Then taking it from your bank account monthly along with a monthly income from the crystallised part of the pension.

The only company specifically mentioned to offer a monthly drawdown payment of a mixture of tax free cash and taxable income is Aviva, and that was found via their advisor site . Also it is mentioned they are one of the few to offer this facility ( although that comment was a few years ago) 

Maybe the main providers used by advisors offer it, but it does not seem to be readily available in this monthly format for retail customers ?

It looks there are different complications with different providers - some want you to set up a totally separate account for any type of payment out - even UFPLS. Note this isn't a separate crystallised account, which would make sense to separate crystallised and uncrystallised, but a separate drawdown/payment account which could contain crystallised or uncrystallised funds, or maybe a mix.  See this example from Aegon (for their Master trust workplace scheme):

https://www.aegon.co.uk/content/dam/ukpaw/documents/Master-Trust-Drawdown-Member-Guide.pdf

Looks like Royal London do similar.

Looks overly complicated to me - you have your original account which you can only pay into to and transfer out to your payment account, then the payment account which might contain both crystallised and uncrystallised parts. I'd prefer simple uncrystallised and crystallised accounts, where I can pay into the uncrystallised and draw out UFPLSs, crystallise chunks when I need to, taking the PCLS up front, and draw regular taxable income from the crystaliised funds as needed.

There's nothing particularly magical about getting a PCLS with every taxable income payment - moving a year or two's spending into the crystallised fund and taking the PCLS up front for that year achieves virtually the same. Maybe it's better for people who are incapable of budgeting? It's make very marginal differences for other stuff like IHT, tax on growth etc especially if you ISA up the PCLS. 

But it wouldn't be an issue that would cause me to switch providers, other things are more important.