SIPP Flexi access drawdown and PCLS

BPL

Could anyone explain 25% Tec free PCLS in FAD? Do i get one every time I crystallise from my pot to drawdown or only once at the start our can i choose if i crystallise Tec free cash or taxable cash. I have exhausted Google so would appreciate some advice.

BPL

Sorry for the typos Tec=Tax

Linton

You have 3 choices regarding drawdown and the tax free lump sum:
1) Take all the tax free lump sum before you start drawdown.  This drawdown will be fully liable to tax.
2) Use UFPLS under which whch you don't take the TFLS as a single pot, but rather get 25% of each drawdown tax free.
3) Effectively split your pension.  You can then separately use (1) for each part.

Exactly which options are available and how they are implemented may depend on your platform/supplier.

Albermarle

If you go to the websites of a few main pension providers they all have sections explaining  the options to take your retirement income . Have a look at these ( HL, Fidelity, Standard Life etc ) and of course your own providers website,.

BPL

Linton said:

You have 3 choices regarding drawdown and the tax free lump sum:
1) Take all the tax free lump sum before you start drawdown.  This drawdown will be fully liable to tax.
2) Use UFPLS under which whch you don't take the TFLS as a single pot, but rather get 25% of each drawdown tax free.
3) Effectively split your pension.  You can then separately use (1) for each part.

Exactly which options are available and how they are implemented may depend on your platform/supplier.

So for 3. I have a SIPP pot and a drawn down pot. I can take many times a TFLS and / or TLS or do i have to take 25% TFLS 75% TLS each time to drawn down pot to withdraw at will from that later? Is the difference from UFPLS that i can draw down different percentages of TFLS and TLS each time i move a chunk to drawn down pot? I will need regular income and some occasional larger sums fire a splurge.... 20% tax payer.

Linton

BPL said:

Linton said:

You have 3 choices regarding drawdown and the tax free lump sum:
1) Take all the tax free lump sum before you start drawdown.  This drawdown will be fully liable to tax.
2) Use UFPLS under which whch you don't take the TFLS as a single pot, but rather get 25% of each drawdown tax free.
3) Effectively split your pension.  You can then separately use (1) for each part.

Exactly which options are available and how they are implemented may depend on your platform/supplier.

So for 3. I have a SIPP pot and a drawn down pot. I can take many times a TFLS and / or TLS or do i have to take 25% TFLS 75% TLS each time to drawn down pot to withdraw at will from that later? Is the difference from UFPLS that i can draw down different percentages of TFLS and TLS each time i move a chunk to drawn down pot? I will need regular income and some occasional larger sums fire a splurge.... 20% tax payer.

 - For (1) and (3) you can take the TFLS without taking any taxable drawdown.  If you take the TFLS you must take all of it.  You cannot take a taxable drawdown without having taken the TFLS.  
 - WIth UFPLS you can only take 25% tax free, 75% taxable for each drawdown.  You cannot vary the %s but of course you can vary the total.

Different platforms implement (3) in different ways.  With HL I believe that if say you want to take 10% TFLS HL will set up a separate account ( a crystallised account) containing 30% of your total pension anhd send you the10% as a TFLS (10%=25% X (30%+10%)).  The 30% is then available for taxable drawdown.  If you wanted a subsequent 10% TFLS HL would move another 30% into the crystalised account and send you your 10% tax free.  Your crystalised account could be invested in a different way to the non crystallised account.
II simply maintain a %crystalised value so you dont have separate accounts.

BPL

Linton said:

BPL said:

Linton said:

You have 3 choices regarding drawdown and the tax free lump sum:
1) Take all the tax free lump sum before you start drawdown.  This drawdown will be fully liable to tax.
2) Use UFPLS under which whch you don't take the TFLS as a single pot, but rather get 25% of each drawdown tax free.
3) Effectively split your pension.  You can then separately use (1) for each part.

Exactly which options are available and how they are implemented may depend on your platform/supplier.

So for 3. I have a SIPP pot and a drawn down pot. I can take many times a TFLS and / or TLS or do i have to take 25% TFLS 75% TLS each time to drawn down pot to withdraw at will from that later? Is the difference from UFPLS that i can draw down different percentages of TFLS and TLS each time i move a chunk to drawn down pot? I will need regular income and some occasional larger sums fire a splurge.... 20% tax payer.

 - For (1) and (3) you can take the TFLS without taking any taxable drawdown.  If you take the TFLS you must take all of it.  You cannot take a taxable drawdown without having taken the TFLS.  
 - WIth UFPLS you can only take 25% tax free, 75% taxable for each drawdown.  You cannot vary the %s but of course you can vary the total.

Different platforms implement (3) in different ways.  With HL I believe that if say you want to take 10% TFLS HL will set up a separate account ( a crystallised account) containing 30% of your total pension anhd send you the10% as a TFLS (10%=25% X (30%+10%)).  The 30% is then available for taxable drawdown.  If you wanted a subsequent 10% TFLS HL would move another 30% into the crystalised account and send you your 10% tax free.  Your crystalised account could be invested in a different way to the non crystallised account.
II simply maintain a %crystalised value so you dont have separate accounts.

Thank you for taking the time writing these excellent explanations. I'm with Fidelity but would be interested in who is easiest to work with for type 3. I am so far horrified how many pdf or paper forms are required and there doesn't seem to be a self service dashboard with any of them. Ii would be my next port of call as I'm not keen on the Woodford smoke and mirrors of HL. An advisor did recommend Curtis Bank just for the SIPP admin. 

Albermarle

All pension providers have a similar problem with paperwork , when it comes to taking retirement income .
I do not think Fidelity are any better or worse than anybody else in this respect , although their free personal retirement guidance service is normally regarded as helpful .

dunstonh

I can take many times a TFLS and / or TLS or do i have to take 25% TFLS 75% TLS each time to drawn down pot to withdraw at will from that later?

You can do mix and match if you want.    Obviously, once you have crystallised some funds in your pension, you can never draw 25% tax free from that part again.  However, you can on the uncrystallised segment of the pension.

 I am so far horrified how many pdf or paper forms are required and there doesn't seem to be a self service dashboard with any of them.

Paper forms will depend on the provider it is going to and the provider it is coming from.     If both of the ceding scheme and receiving scheme use the OPTIONS transfer system then that removes a lot of paperwork. If either do not, then you have paper forms needed as it reverts to the old fashioned way to transfer.

That said, there shouldn't be that much paperwork.

Virtually all platforms have online access.   Platforms that cater for the DIY market will have more DIY functionality than those that cater for the intermediary market (where the intermediary gets the bulk of the functionality).  If you want to DIY, then you should focus on the DIY platforms and not those that are mainly intermediary but have limited DIY functionality.

BPL

 If you want to DIY, then you should focus on the DIY platforms and not those that are mainly intermediary but have limited DIY functionality.

Any DIY recommendations? I was looking at ii as a fidelity alternative and also Curtis Bank just for the SIPP layer. I may use an evidence based IFA to help  but I'm going to drive the platform they can advise me but not be an intermediary.

Albermarle

Paper forms will depend on the provider it is going to and the provider it is coming from.     If both of the ceding scheme and receiving scheme use the OPTIONS transfer system then that removes a lot of paperwork. If either do not, then you have paper forms needed as it reverts to the old fashioned way to transfer.

I think the OP was complaining about the paperwork needed to start taking income from a pension rather than transferring one .

Any DIY recommendations? I was looking at ii as a fidelity alternative and also Curtis Bank just for the SIPP layer. 

For larger sums ( > £100K?) fixed fee sipps usually work out cheaper than ones that charge a % .

II is probably the best known but for very cheap you can also look at Iweb. I think Curtis banks is more of a speciality player and there fore more expensive ( although fixed fee) .

With the % chargers , AJ Bell has a lower % than Fidelity but a few more extra charges . For both of these the charges are much lower if you hold shares , ETF's and Investment trusts rather than OEIC funds . 

The different charging structures means it is a bit horses for courses.