Does anyone know if Aviva offer monthly UFPLS withdrawals?

DairyQueen

Notepad_Phil said:

xylophone said:

Would be interested to know of any DIY platform that offers this facility

https://www.hl.co.uk/help/sipp,-drawdown-and-annuity/ufpls/taking-an-ufpls-uncrystallised-funds-pension-lump-sum/how-do-i-take-an-ufpls-from-the-hl-sipp

https://www.ii.co.uk/ii-accounts/sipp/ufpls#:~:text=How to take UFPLS (lump,payment using your online account.

But aren't both one-off UFPLS payments rather than allowing you to set up a regular monthly (or whatever) payment?

Yes, I think that's the issue across the board.

I investigated UPPLS with HL before I transferred to AJB. HL sent a paper pack of bumf by snail mail. This included forms to manually complete. Plus, a telephone 'interview' was required.

I aborted that attempt.

Fast forward 4 years and AJB offers an online facility to process a one-off UFPLS payment but have withdrawn the 'monthly payment from uncrystallised funds' that they formerly offered. I will need to repeat the process every month and it will take about 3 weeks to process each payment. The questionnaire is online and will need to be completed at random intervals. This is an improvement on HL but not exactly seamless.

ii appears to adopt the same process as AJB.

I simply want to set-up an automatic regular payment from uncrystallised funds - call it a UFPRP rather than a UFPLS. It would operate exactly the same way as a regular payment from crystallised funds except the 25% tax free amount would be paid separately from the taxable amount to avoid screwing with tax and 'payroll'.

The best option available perhaps?.....

- make a UFPLS request for the desired monthly amount in month 1 of the tax year. Provider then receives a tax code from HMRC and I avoid overpaying tax.
- in month 2 make a second UFPLS request for the total of the remaining 11 monthly payments. Pay the correct amount of tax. Reserve one month for month 2 expenses and transfer the remaining 10 months to an interest-bearing account.
- transfer 10% of the remainder from the savings account each month for the remaining 10 months of the tax year.

Rinse and repeat.

Does that sound reasonable?

Unless anyone knows of a platform that offers my take on 'UFPRP' of course.

coyrls

The withdrawal to get a tax code is one off, it doesn't need to be repeated each year.

Albermarle

The info  from our resident IFA, is that it is possible via some  platforms available to financial advisors . Sometimes probably just a different version from the same provider . I guess working via the IFA gets the provider off the hook for any compliance issues.

Knock_Rock

Thanks for asking the question Gazza.
My recent workplace pension is with Aviva & I was mulling over the same idea, ufpls monthly instead of once a year.
In my case (obviously everyones position & objectives are massively different) my objective is to draw from this one in the first few years (3 to 4 maybe)? Of early retirement without paying tax, supplemented with isa/premium bonds/cash.
Delaying taking a d.b. pension earlier in the meantime.
So i figured a similar, maybe easier to impement option  .. when no income in tax year. Take £4000 tfls. £12000 into drawdown. Request £1000 pm from drawdown crystallised portion. £16000 in year, no tax to pay. Do similar next tax year. Would think this should be less admin year by year?

thanks again for the post.

Notepad_Phil

DairyQueen said:

The best option available perhaps?.....

- make a UFPLS request for the desired monthly amount in month 1 of the tax year. Provider then receives a tax code from HMRC and I avoid overpaying tax.
- in month 2 make a second UFPLS request for the total of the remaining 11 monthly payments. Pay the correct amount of tax. Reserve one month for month 2 expenses and transfer the remaining 10 months to an interest-bearing account.
- transfer 10% of the remainder from the savings account each month for the remaining 10 months of the tax year.

Rinse and repeat.

Does that sound reasonable?

I'm not a tax expert but aren't most tax codes done on a cumulative basis, so your month 2 income will incur a lot of tax as it's way over what it thinks is your normal monthly income and so you'll either have to reclaim the tax via whatever form is needed, or you wait for the tax man to catch up in the next financial year.

Albermarle

Knock_Rock said:

Thanks for asking the question Gazza.
My recent workplace pension is with Aviva & I was mulling over the same idea, ufpls monthly instead of once a year.
In my case (obviously everyones position & objectives are massively different) my objective is to draw from this one in the first few years (3 to 4 maybe)? Of early retirement without paying tax, supplemented with isa/premium bonds/cash.
Delaying taking a d.b. pension earlier in the meantime.
So i figured a similar, maybe easier to impement option  .. when no income in tax year. Take £4000 tfls. £12000 into drawdown. Request £1000 pm from drawdown crystallised portion. £16000 in year, no tax to pay. Do similar next tax year. Would think this should be less admin year by year?

thanks again for the post.

This method seems easier to implement than monthly UFPLS and should only mean once per year contact with the provider.
To make it even easier you could withdraw say £20K TFLS ,( put it in a S&S ISA as an idea. )Then you can set up the regular payments that should run for the next 5 years .

Linton

Taking money from a SIPP is a hassle however you do it, so I would recommend that you just do it once a year and park any unused money in an S&S ISA /savings account/PBs/current account as appropriate.  You can then easily get tax free money whenever you need it.  Unless you need to keep money  in a pension for IHT reasons it would be least effort  to withdraw the maximum you can each year whilst keeping within your tax band and take all your expenses from your cash/S&S ISAs.

This is what I do or did until my ISAs and cash got so large that they did not need replenishing from the SIPP.

Smetimes people think that using UFPLS rather than taking a Tax Free Lump sum and putting it in an S&S ISA somehow benefits them as the amount of tax free income increases with the pension investments.  Yes you do pay less tax in £ terms but It doesnt actually make any difference to your take home pay as long as you keep in the same tax band:

(25% of initial sum  X Return in SIPP tax free) = (25% tax free of initial sum from SIPP) X Return in S&S ISA tax free