Drawdown Options

Notepad_Phil

segovia said:

I think I am getting it now, one more question. 

If I cashed in 30K of my investments and moved it to drawdown, I take 25% Tax-Free but didn't want to take the taxable balance immediately, where does the remaining 75% sit. I wouldn't want it in cash. 

You can keep the money invested in funds if that is what you want. You will just need to make sure that there is enough cash available when the platform needs to take it out to pay any scheduled withdrawal, but you don't need it there if you've nothing scheduled (other than any cash you need to pay the platform service charges).

Albermarle

segovia said:

I think I am getting it now, one more question. 

If I cashed in 30K of my investments and moved it to drawdown, I take 25% Tax-Free but didn't want to take the taxable balance immediately, where does the remaining 75% sit. I wouldn't want it in cash. 

Normally it would stay invested .It would only be in cash if that is what you wanted .
Exactly how it works depends on the provider .
With most ( I think)  you will have two separate pots - uncrystallised and crystallised ( this is the 75% of £30k in your example ) . You can invest the two parts in the same way, or in different ways if you want .
With some providers you can only see one pot , all invested in the same way . Somewhere there will be a %figure of how much of the pot is crystallised .

Also just to add , regarding your plan to withdraw the money , this will also be provider dependent . An older pension will most likely not have this kind of flexibility . So you need to study your providers website, and maybe also give them a call before making any final decisions.

segovia

Albermarle said:

segovia said:

I think I am getting it now, one more question. 

If I cashed in 30K of my investments and moved it to drawdown, I take 25% Tax-Free but didn't want to take the taxable balance immediately, where does the remaining 75% sit. I wouldn't want it in cash. 

Normally it would stay invested .It would only be in cash if that is what you wanted .
Exactly how it works depends on the provider .
With most ( I think)  you will have two separate pots - uncrystallised and crystallised ( this is the 75% of £30k in your example ) . You can invest the two parts in the same way, or in different ways if you want .
With some providers you can only see one pot , all invested in the same way . Somewhere there will be a %figure of how much of the pot is crystallised .

Also just to add , regarding your plan to withdraw the money , this will also be provider dependent . An older pension will most likely not have this kind of flexibility . So you need to study your providers website, and maybe also give them a call before making any final decisions.

I have two SIPPS and they were both created within the last 4 years when I consolidated pensions,  Aj Bell and Interactive Investor, I am assuming that both operate drawdown in a similar manner. Or is that wishful thinking?

dunstonh

, I am assuming that both operate drawdown in a similar manner. Or is that wishful thinking?

The outcomes should be the same but different software will handle it in different ways.   As I mentioned on my earlier post.

Albermarle

segovia said:

Albermarle said:

segovia said:

I think I am getting it now, one more question. 

If I cashed in 30K of my investments and moved it to drawdown, I take 25% Tax-Free but didn't want to take the taxable balance immediately, where does the remaining 75% sit. I wouldn't want it in cash. 

Normally it would stay invested .It would only be in cash if that is what you wanted .
Exactly how it works depends on the provider .
With most ( I think)  you will have two separate pots - uncrystallised and crystallised ( this is the 75% of £30k in your example ) . You can invest the two parts in the same way, or in different ways if you want .
With some providers you can only see one pot , all invested in the same way . Somewhere there will be a %figure of how much of the pot is crystallised .

Also just to add , regarding your plan to withdraw the money , this will also be provider dependent . An older pension will most likely not have this kind of flexibility . So you need to study your providers website, and maybe also give them a call before making any final decisions.

I have two SIPPS and they were both created within the last 4 years when I consolidated pensions,  Aj Bell and Interactive Investor, I am assuming that both operate drawdown in a similar manner. Or is that wishful thinking?

At least they will both offer flexible drawdown as they are modern pension providers but as Dunstonh says the mechanics could be a bit different . It might be easier to just drawdown from one at a time and this will also reduce any potential confusion with HMRC over how they are taxed.

Landmarc

Wouldn't it be better in this case to consolidate first to do things in the least confusing way possible?  Then and only then one could start comprehending how to go into Flexi Access Drawdown?  Vanguard insist one takes 3 telephone consultations (lasting approximately 1 hour each), of which the first is with Pension Wise followed by two consultations with Vanguard Pensions and Retirement Advisors who discuss all of your options in detail and which one would be best for you before proceeding with any action.  That way they get to monitor and check which option you choose is really the right one for you, and this advice is all free!

segovia

Landmarc said:

Wouldn't it be better in this case to consolidate first to do things in the least confusing way possible?  Then and only then one could start comprehending how to go into Flexi Access Drawdown?  Vanguard insist one takes 3 telephone consultations (lasting approximately 1 hour each), of which the first is with Pension Wise followed by two consultations with Vanguard Pensions and Retirement Advisors who discuss all of your options in detail and which one would be best for you before proceeding with any action.  That way they get to monitor and check which option you choose is really the right one for you, and this advice is all free!

Yes, I will consolidate with one or the other unless there are benefits of having in two SIPP providers 

Landmarc

segovia said:

Yes, I will consolidate with one or the other unless there are benefits of having in two SIPP providers 

Yes you are quite right about potential benefits to lose, and that's where the one hour free consultation with Pension Wise will help you consider that option before proceeding any further.