Drawdown Pensions - your experiences during 2020 and intentions in 2021?

ukdw

If you are likely to only be drawing down a small number of months this tax year it is worth making sure you consider still making full use of your tax free allowance, you could always re-invest the 'extra' drawdown into a S&S ISA if you don't feel comfortable taking money out of the market at the moment.

Unless your drawdown rate is very high then I don't think it is necessary to be varying your level of drawdown  quite so much  (if at all), based on current or expected future market conditions. 

Personally I did reduce my drawdown rate a little in April (by deferring a planned increase), and actually reduced it even more, right down to the tax free allowance level once the markets recovered - as I decided I might as well spend savings and leave pension money invested while interest rates available are currently so low. 

stephenadarglas

I invest my small SIPP in a global multi asset fund.  It's value was 85000 in October 2017 and was 102000 in October 2020.  Turned 17000 into cash recently (total return) and will take a monthly amount up until August 2023 which is my state pension age.  I shall then re-evaluate.  This works for me as I have DB money coming in as well.  The SIPP is a 'Brucey Bonus'.

thriftytracey

Thinking back about it I don't think it was as much as 20%, maybe about £30k down on £299k.  Apologies I wasn't checking the values back then.  I don't know if you can retrospectively check the value back in March 2020.

My portfolio is Royal London Governed Retirement Income Portfolio 3.
RLP Global Managed 33.25%
RLP Medium 10 yr Corporate Bond 11.11%
RLP Medium 10 yr Index Linked 10.20%
RLP Property 7.58%
RLP Medium (10 yr) Gilt 6.96%
RLP Global High Yield Bond 6.42%
RLP Sterling Extra Yield Bond 6.34%
RLP Cash Plus 5.31%
RLP Commodity 5.15%
RLP Absolute Return Government Bond 2.94%
RLP Deposit 2.39%
RLP Short Duration Global High Yield 2.35%
Investment Attitude to Risk:  Cautious to Moderate.

thriftytracey

Drawdown is only a little above Personal Tax Free Allowance.

NottinghamKnight

thriftytracey said:

Thinking back about it I don't think it was as much as 20%, maybe about £30k down on £299k.  Apologies I wasn't checking the values back then.  I don't know if you can retrospectively check the value back in March 2020.

My portfolio is Royal London Governed Retirement Income Portfolio 3.
RLP Global Managed 33.25%
RLP Medium 10 yr Corporate Bond 11.11%
RLP Medium 10 yr Index Linked 10.20%
RLP Property 7.58%
RLP Medium (10 yr) Gilt 6.96%
RLP Global High Yield Bond 6.42%
RLP Sterling Extra Yield Bond 6.34%
RLP Cash Plus 5.31%
RLP Commodity 5.15%
RLP Absolute Return Government Bond 2.94%
RLP Deposit 2.39%
RLP Short Duration Global High Yield 2.35%
Investment Attitude to Risk:  Cautious to Moderate.

You can sign up for a free account with trustnet just using an email address. If the access you currently have isn't good this will allow you to review your portfolio in terms of performance and allocation amongst other factors. A quick look showed your largest fund being a moderate underperformer against it's benchmark over the last few years, -0.7% as opposed to a benchmark of 7.9% over the last year but up 23.8% against a benchmark of 23.3% for the previous year. 

ukdw

Look like RL GRIP3 went down about 11% see - - https://adviser.royallondon.com/globalassets/docs/adviser/investments/grip3-data-sheet.pdf

ukdw

thriftytracey said:

Drawdown is only a little above Personal Tax Free Allowance.

£12,500 is about 4.2% of £299k - so not a particularly high rate - especially if you are planning on reducing drawdown a bit once you start getting state pension.

BritishInvestor

ukdw said:

thriftytracey said:

Drawdown is only a little above Personal Tax Free Allowance.

£12,500 is about 4.2% of £299k - so not a particularly high rate - especially if you are planning on reducing drawdown a bit once you start getting state pension.

High rate relative to what? 

[Deleted User]

thriftytracey said:

Thinking back about it I don't think it was as much as 20%, maybe about £30k down on £299k.  Apologies I wasn't checking the values back then.  I don't know if you can retrospectively check the value back in March 2020.

My portfolio is Royal London Governed Retirement Income Portfolio 3.
RLP Global Managed 33.25%
RLP Medium 10 yr Corporate Bond 11.11%
RLP Medium 10 yr Index Linked 10.20%
RLP Property 7.58%
RLP Medium (10 yr) Gilt 6.96%
RLP Global High Yield Bond 6.42%
RLP Sterling Extra Yield Bond 6.34%
RLP Cash Plus 5.31%
RLP Commodity 5.15%
RLP Absolute Return Government Bond 2.94%
RLP Deposit 2.39%
RLP Short Duration Global High Yield 2.35%
Investment Attitude to Risk:  Cautious to Moderate.

Just my opinion, so take it for what its worth... Its a high risk portfolio.  The probability that in real term the value of this portfolio will go down is very high even if you withdraw nothing at all.  Once you subtract two layers of charges and inflation, I don’t see any positive return as being plausible.

On top of that, if a real economic crisis were to occur, the value of this portfolio will drop a lot.  Although the proportion of equity is very small, RL collected a bunch of esoteric assets within their “moderate” portfolio.  Junk bonds, commodity, property - all of these can drop like a stone, more than equity, during  a major event.  And because some of these assets are  not liquid, RL might prevent you from withdrawing money when you need it. 

So, the allocation combines a promise of lack of growth with high downward risks.  Not a great combination. Again, just my opinion. 

ukdw

BritishInvestor said:

ukdw said:

thriftytracey said:

Drawdown is only a little above Personal Tax Free Allowance.

£12,500 is about 4.2% of £299k - so not a particularly high rate - especially if you are planning on reducing drawdown a bit once you start getting state pension.

High rate relative to what? 

Relative to the 4% safe withdrawal rate, 3.5% used by some people, and 5% used by people following the more advanced ideas mentioned in this thread.

https://forums.moneysavingexpert.com/discussion/5466114/drawdown-safe-withdrawal-rates/p1

If I had a £299k DC with a state pension of I presume £9.1k coming in 6 years, I would subtract 6x9.1k from the £299k - giving £244k.   I would then probably apply between 3.5% and 5% to the £244k giving an ongoing withdrawal rate of about say £9.7k (4%).

In the intervening years before state pension I would withdraw the £9.7k plus an extra £9.1k in leu of state pension - so up £18.8k.   So based on this calculation £12,500 is not a particularly high withdrawal rate.