Help with HL Three Small Pots

anselld

Hi,
    I am approaching the LTA and want to make use of the three small pots facility offered by HL to give me a bit more headroom.

    Currently pension its with Aegon ARC and is part drawdown part uncrystallised.
    So the plan is to convert £30k of units to cash within the ARC uncrystallised pot, then request HL to open a new SIPP and transfer in the £30k.  After which I will take as three small pots.  Hopefully I have understood that correctly.

    The question is around the paperwork....
The HL form asks "Tick if partial transfer", fine, tick.
Then "Approx value of drawdown funds", and "Approx value of funds not in drawdown".  So do I put "0", "30,000" respectively to indicate the exact amount to transfer?  Or the actual current values which are much higher?  (If the latter there is nowhere else on the form to indicate the £30k)
Finally it asks "Tick if this is a drawdown policy".  Well, it is in drawdown partially but I only want to partially transfer from uncrystallised, so presumably not-tick?

My instinct would be to complete as follow ...
Approx value of drawdown funds    £0
Approx value of funds not in drawdown  £30,000
Tick if partial transfer  TICK
Tick if this is a drawdown policy  NOT-TICK

Can anyone who has done it confirm?

Croeso69

Sounds abought right. For a partial transfer they take the exact amount you requested.

Crystallised pots must be transferred in their entirety. You can only partially transfer uncrystallised pots. Not an issue in your scenario.

Albermarle

It is surprising HL will do this , as it must be a lot of work for almost zero reward.
Other platforms operate restrictions on short term customers 
I know if you transfer pension money to AJ Bell and withdraw it within 12 months, there is a £300 charge .( even though they will not split into 3 pots ) 

JamesP8

anselld said:

Hi,
    I am approaching the LTA and want to make use of the three small pots facility offered by HL to give me a bit more headroom.

    Currently pension its with Aegon ARC and is part drawdown part uncrystallised.
    So the plan is to convert £30k of units to cash within the ARC uncrystallised pot, then request HL to open a new SIPP and transfer in the £30k.  After which I will take as three small pots.  Hopefully I have understood that correctly.

    The question is around the paperwork....
The HL form asks "Tick if partial transfer", fine, tick.
Then "Approx value of drawdown funds", and "Approx value of funds not in drawdown".  So do I put "0", "30,000" respectively to indicate the exact amount to transfer?  Or the actual current values which are much higher?  (If the latter there is nowhere else on the form to indicate the £30k)
Finally it asks "Tick if this is a drawdown policy".  Well, it is in drawdown partially but I only want to partially transfer from uncrystallised, so presumably not-tick?

My instinct would be to complete as follow ...
Approx value of drawdown funds    £0
Approx value of funds not in drawdown  £30,000
Tick if partial transfer  TICK
Tick if this is a drawdown policy  NOT-TICK

Can anyone who has done it confirm?

Hello, I was just wondering how this finalised, did it all work out as expected with HL, three pots etc.?

anselld

JamesP8 said:

anselld said:

Hi,
    I am approaching the LTA and want to make use of the three small pots facility offered by HL to give me a bit more headroom.

    Currently pension its with Aegon ARC and is part drawdown part uncrystallised.
    So the plan is to convert £30k of units to cash within the ARC uncrystallised pot, then request HL to open a new SIPP and transfer in the £30k.  After which I will take as three small pots.  Hopefully I have understood that correctly.

    The question is around the paperwork....
The HL form asks "Tick if partial transfer", fine, tick.
Then "Approx value of drawdown funds", and "Approx value of funds not in drawdown".  So do I put "0", "30,000" respectively to indicate the exact amount to transfer?  Or the actual current values which are much higher?  (If the latter there is nowhere else on the form to indicate the £30k)
Finally it asks "Tick if this is a drawdown policy".  Well, it is in drawdown partially but I only want to partially transfer from uncrystallised, so presumably not-tick?

My instinct would be to complete as follow ...
Approx value of drawdown funds    £0
Approx value of funds not in drawdown  £30,000
Tick if partial transfer  TICK
Tick if this is a drawdown policy  NOT-TICK

Can anyone who has done it confirm?

Hello, I was just wondering how this finalised, did it all work out as expected with HL, three pots etc.?

Thanks, yes so far so good.  The transfer was very smooth.  Not much seemed to happen for a few weeks and then all of a suddent there is was.

I have drawn the first pot, that took a couple of weeks all together starting with a phone "questionaire" then they send you the forms by post.  Tedious but not difficult.  You have to do the whole questionaire-form thing from scratch for each pot but again not difficult.

HL seem efficient.  The first person to answer the phone just does everything, no phone menus or transfers to other departments, etc.  I feel guilty they are not making any money on this!

JamesP8

That's great, thanks for the update. 

OldBeanz

Thinking of doing this as well but from the Govt web site which implies the payments have to be from "different personal pensions". It is qualified by the word "usual".
https://www.gov.uk/tax-on-pension/tax-free

A pension worth up to £10,000

You can usually take any pension worth up to £10,000 in one go. This is called a ‘small pot’ lump sum. If you take this option, 25% is tax-free.

You can usually get:

up to 3 small pot lump sums from different personal pensions
unlimited small pot lump sums from different workplace pensions"

drumtochty

The difference between what HMRC etc say in their guidance and what the actual law states.

Albermarle

Although I am sure what HL do in splitting off small pots from bigger ones is legal , it is against the spirit of the law in my opinion . Which is probably why nobody else does it . Although could be just it is too much hassle for little reward.

cobson

From the Pension Tax Manual:

"..an individual can be given more than one small lump sum each not exceeding the limit that applied at the time the lump sum was paid, if all the other conditions are met. It should be noted that Regulation 11A applies at arrangement level rather than at scheme level. So the payments can be made from two/three separate registered pension schemes or from the same scheme where the payments are made from two/three different arrangements under that scheme.

As one of the conditions is that the payment extinguishes the member’s entitlement to benefits under the arrangement from which the payment is made but not necessarily their entitlement under the scheme as a whole, a member can take a small lump sum under Regulation 11A even though they may still have an entitlement to benefits under another arrangement under that scheme."

So HMRC are quite happy with it.

bluenose1

My experience withdrawing 2 small pots this month.
Messaged them and they sent me the small pots application form.
Completed, posted and Small pots forms  received by HL 4th June.
Contacted them 10th June for update and advised need to complete No Risk Questionnaire over phone. Done within 5 minutes.
First small pot received in my bank account 15th June.
Second small pot received in my bank account 16th June.
So all  in all a very good experience.

Had email day after first payment from HMRC to say my tax code has changed. When I logged on said my earnings this year from HL was £75k and I would be paying tax of £25k. I wish, well not the tax part. 
Easy to just change my income to the correct amount from HL and next day my tax corrected. HMRC system had obviously just assumed I would be getting these payments monthly.