Difference between flexi-access-drawdown and UFPLS

dunstonh

cobson said:

dunstonh said:

Phased is often used to describe the taking of the 75/25 on a regular basis.  Such as £1000pm being paid as 25% tax free cash and 75% taxable.

Isn't that just the same as UFPLS ?

UFPLS is a lump sum.   regular UFPLS has no official term.   Most of the intermediary platforms refer to it as phased flexi access.   However, it is effectively software doing an automated monthly UFPLS.  However, generically, phased can mean anything where you take the draw in stages.

The lack of consistent terminology really doesn't help. Still, it could be worse.  We could still be back in the days were products were named after the sections of the act of parliament.  I will have a section 98 withdrawal, please as section 85 doesn't work for me.

tichtich

dunstonh said:

cobson said:

dunstonh said:

Phased is often used to describe the taking of the 75/25 on a regular basis.  Such as £1000pm being paid as 25% tax free cash and 75% taxable.

Isn't that just the same as UFPLS ?

UFPLS is a lump sum.   regular UFPLS has no official term.   Most of the intermediary platforms refer to it as phased flexi access.   However, it is effectively software doing an automated monthly UFPLS.  However, generically, phased can mean anything where you take the draw in stages.

The lack of consistent terminology really doesn't help. Still, it could be worse.  We could still be back in the days were products were named after the sections of the act of parliament.  I will have a section 98 withdrawal, please as section 85 doesn't work for me.

Now that we're using metaphorical terms like "crystallized", I'm looking forward to having a germinating pension with a transmogrified lump sum.

michaels

Are we basically saying that there are two drawdown strategies:
1) Where any crystallised funds are fully drawn down
2) Where the pot has at least some crystallised element?

Albermarle

UFPLS is a lump sum.   regular UFPLS has no official term.

From previous threads, it seems that organising regular ( or more than one a year )  UFPLS payments with a provider is very difficult . They treat each withdrawal as a separate lump sum and need all the forms filled in and the telephone conversations for each one . So for regular 25/75 withdrawals it is better to do it Phased Flexi drawdown ( exact terminology to be debated  )

Although some posters seem to prefer to take one UFPLS payment a year and put it in the bank .

green_man

Albermarle said:

UFPLS is a lump sum.   regular UFPLS has no official term.

From previous threads, it seems that organising regular ( or more than one a year )  UFPLS payments with a provider is very difficult . They treat each withdrawal as a separate lump sum and need all the forms filled in and the telephone conversations for each one . So for regular 25/75 withdrawals it is better to do it Phased Flexi drawdown ( exact terminology to be debated  )

Although some posters seem to prefer to take one UFPLS payment a year and put it in the bank .

Yes that’s certainly the case with my provider.  Each UFPLS is accompanied by a heap of forms and documents and has an associated  cost. Hence I do the one per year, this arrangement is the most cost effective for my pot size and provider. Other providers do thinks differently, so check your providers options and costs to find the most efficient method for you.

I’m still awaiting a provider that you can completely manage your SIPP including withdrawals online. I know there are various regulatory requirements but surely it’s not beyond the skill of man to provide something that satisfies these requirements but provides complete ad hoc flexibility aka an ISA/bank account.

dunstonh

Albermarle said:

UFPLS is a lump sum.   regular UFPLS has no official term.

From previous threads, it seems that organising regular ( or more than one a year )  UFPLS payments with a provider is very difficult . They treat each withdrawal as a separate lump sum and need all the forms filled in and the telephone conversations for each one . So for regular 25/75 withdrawals it is better to do it Phased Flexi drawdown ( exact terminology to be debated  )

Although some posters seem to prefer to take one UFPLS payment a year and put it in the bank .

From memory, I think that is an issue on the DIY side as it certainly isn't on the intermediary side.  Although it may be understanding of the software that is the issue.   On the intermediary side, phased usually gets keyed under drawdown rather than UFPLS. i..e you don't select UFPLS but select phased drawdown or selected drawdown and then select phased later in the process.

zagfles

The problem with the new flexibilities is they are too flexible, and most providers don't offer (or easily offer) them all. The general rule seems to be that retail SIPP providers usually offer all the flexibilites but only UFPLS as one off events you have to apply for each time. But you can phase by partially crystallising and you either have two accounts separating crystallised and uncrystalised, or one account where they maintain a crystallised %.

Whereas workplace providers and providers who deal via intermediaries tend to offer either full crystallisation or regular UFPLSs as their main options, they also seem to insist on a separate sub-account for "spending" even if just drawing UFPLSs, which seems unnecessary as it's all uncrystallised funds.

Albermarle

Whereas workplace providers and providers who deal via intermediaries tend to offer either full crystallisation 

Also I think in some cases you have to take the full 25% tax free in one go, but most allow you take it in stages as another flexible option .

jamesd

TVAS said:

1. UFPLS = say your fund is 100,000 but you only want to take 10k you can crystallise 10k 2.5k tax free cash 7.5k income which is added to other income earned in that year.
...

UFPLS comes in handy if you are an active member of a money purchase scheme you build up a fund lets say 10k and you want to access it whilst working as additional income knowing you have previous pensions and you are still contributing the scheme that you can now take the 10k built up fund.

You missed something potentially important: using UFPLS triggers the money purchase annual allowance and immediately restricts future money purchase pension contributions to 4k a year.

By contrast, small pots rule or taking the pension commencement lump sum (tax free cash) and leaving the taxable 75% until later delays that consequence.

As a result, someone able to make more than 4k of pension contributions in any future year is likely to be better advised not to use UFPLS until their remaining work time makes the MPAA irrelevant.

bluenose1

jamesd said:  You missed something potentially important: using UFPLS triggers the money purchase annual allowance and immediately restricts future money purchase pension contributions to 4k a year.

By contrast, small pots rule or taking the pension commencement lump sum (tax free cash) and leaving the taxable 75% until later delays that consequence.

As a result, someone able to make more than 4k of pension contributions in any future year is likely to be better advised not to use UFPLS until their remaining work time makes the MPAA irrelevant.

Many thanks jamesd you have saved me considering a costly error. I thought I could take 25% tax free of my USS DC tax pot at 55 whilst still working and not affect the MPAA.
However looking on their website the only option would be UFPLS.
I had assumed they let me take the 25% so my pot would not be crystallised.

Actually worked out quite well as considering I have done so much research on pensions I didn’t realise I still earned interest if I kept my 5 years DC pot to live on in cash. Latest figures are 0.8% so not bad for no risk. 

Thanks again, I never stop learning on here.