Any point to choosing UFPLS?

Ciprico

Is it not true to say mathematically they are equivalent... But one is maintenance free once set up and the other requires ongoing managing.... 

For example using UPFLS your tax code/calculations would be much easier/constant than making ad-hoc withdrawals of some taxable and some tax free pension withdrawals.... 

zagfles

Ciprico said:

Is it not true to say mathematically they are equivalent... But one is maintenance free once set up and the other requires ongoing managing.... 

For example using UPFLS your tax code/calculations would be much easier/constant than making ad-hoc withdrawals of some taxable and some tax free pension withdrawals.... 

If the taxable part was consistent then it would be the same either way. 

For instance, monthly UFPLS of £1400: £1050 taxable income per month, £350 tax free per month

Or crystallise a year's income: take £4200 tax free up front, and draw £1050 taxable per month.

Exactly the same as far as tax/tax codes go.

squirrelpie

Ciprico said:

Is it not true to say mathematically they are equivalent... But one is maintenance free once set up and the other requires ongoing managing.... 

For example using UPFLS your tax code/calculations would be much easier/constant than making ad-hoc withdrawals of some taxable and some tax free pension withdrawals.... 

 Which is simpler all depends on what options the provider provides and what hoops they require you to jump through for each. Mathematically doesn't matter, reality is what bites.

green_man

In my case, with my provider, using UFPLS has half the fees compared to drawdown.  Either or both would suit me fine in theory, so I choose UFPLS and save a a couple of hundred pounds fees a year.

dunstonh

green_man said:

In my case, with my provider, using UFPLS has half the fees compared to drawdown.  Either or both would suit me fine in theory, so I choose UFPLS and save a a couple of hundred pounds fees a year.

Good to have choice.  However, it is unusual for fees to exist for any method of drawdown nowadays.

squirrelpie

AIUI no retail SIPP allows monthly UFPLS withdrawals (or other repeated regular intervals), so unless something has changed it's pointless talking about the possibility.

dunstonh

squirrelpie said:

AIUI no retail SIPP allows monthly UFPLS withdrawals (or other repeated regular intervals), so unless something has changed it's pointless talking about the possibility.

Nearly all, if not all, of the retail SIPPs on the intermediary side offer monthly UFPLS.    It seems to be missing on the DIY side.

Prism

squirrelpie said:

AIUI no retail SIPP allows monthly UFPLS withdrawals (or other repeated regular intervals), so unless something has changed it's pointless talking about the possibility.

Yes, it seems to be that they offer monthly FAD instead. So each year you would take the tax free element first and then split the rest into 12 monthly payments if desired.

squirrelpie

dunstonh said:

squirrelpie said:

AIUI no retail SIPP allows monthly UFPLS withdrawals (or other repeated regular intervals), so unless something has changed it's pointless talking about the possibility.

Nearly all, if not all, of the retail SIPPs on the intermediary side offer monthly UFPLS.    It seems to be missing on the DIY side.

Sorry to me, 'retail' means something I buy myself. If there's an intermediary involved then it isn't retail to my way of thinking. Apologies for any confusion.

zagfles

Prism said:

squirrelpie said:

AIUI no retail SIPP allows monthly UFPLS withdrawals (or other repeated regular intervals), so unless something has changed it's pointless talking about the possibility.

Yes, it seems to be that they offer monthly FAD instead. So each year you would take the tax free element first and then split the rest into 12 monthly payments if desired.

Yes, so not much different really. You just take the whole year's tax free up front instead of monthly. Or you could do a few year's worth. The other thing is if you're at risk of exceeding the LTA, each UFPLS is a BCE so if you take monthly UFPLS you have 12 BCEs a year rather than 1.