Flexible Drawdown Strategies

squirrelpie

DavidT67 said:

Also HL charge two separate account fees for the SIPP and Drawdown accounts, some other brokers don't. 

Ooh, that's sneaky! I'd never realized because I have only ever crystallized a year's income at a time and just kept it as cash through laziness. Thanks for the heads up.

Moonwolf

Albermarle said:

Also as always you have to be careful with figures. Some people seem to have low outgoings but they do not include motoring or holiday costs for example. One guideline is here. Home - PLSA - Retirement Living Standards
You can quibble with some of the figures but it is just a guideline.

Yes, I have used three mechanisms to look at outgoings. 

One is the above. Our combined income without any DC input would be moderate.  So anything available from DC moves me towards comfortable.

The second is top down, what am I living on now, minus work costs and mortgage (we only have £4,500 left to pay),

The third is bottom up.  Listing everything I think I will spend money on, I have holidays, insurance, car, eating out, hobbies including photography and running shoes, clothes and presents, there is £150 a month for new tech (phones every 2 years, computer and tablet every 5) and money for glasses and prescriptions (which are not free in the bridging years). 

I'm there by 59 if I am happy to run out of DC at 90 and drop to moderate spending.  Will I still be wanting 2-3 holidays a year and buying running shoes at 90?

All that is left is how robust my plans are, is 2.5% pot growth above inflation too generous, some are using 2%? A big market correction might leave me running out at 80 instead of 90, or even earlier. The longer I leave it before pulling the trigger, the lower the risk of running out early is, more DB pension and less bridging spend.  However, work isn't fun at the moment and I have had two different primary cancers in the last 5 years (one stage 2, one stage 1 so a wakeup call rather than dangerous in themselves).  The threads are informative and help balance the competing worries but aren't definitive.

Steve_666_

"  Will I still be wanting 2-3 holidays a year and buying running shoes at 90?"  go faster rubber bungs for your zimmer?

Albermarle

I'm there by 59 if I am happy to run out of DC at 90 and drop to moderate spending.  Will I still be wanting 2-3 holidays a year and buying running shoes at 90?

Often a U shaped curve of spending can be seen . More in first years of retirement, then slowly going down and then shooting up again at the end due to care costs etc. Obviously it will vary from person to person.

is 2.5% pot growth above inflation too generous, some are using 2%? A big market correction might leave me running out at 80 instead of 90, or even earlier.

One thing is for sure that between now and then there will be a big market correction, probably two or three, plus a lot of smaller ones. As the last decade was so good for investors, the general feeling was that forecasts for this decade should be cautious ( so far proved correct) . Probably 2% above inflation is high enough.

Albermarle

DavidT67 said:

LHW99 said:

Dows anyone have examples of how easy different platforms make it to draw down flexibly choosing what is taxable and what is tax free, and/or leaving crystallised funds in the portfolio.  Are some easier than others.

Just on this point, it will depend on the platform. I believe HL keep crystallised and uncrystallised pots separate, whereas other (DIY) platforms keep it as one, but mark the % that has been crystallised. If you use an IFA, they presumably keep track on it for you.

Also HL charge two separate account fees for the SIPP and Drawdown accounts, some other brokers don't. 

As HL charge a % fee then of course they will charge that on all funds, whether you have one pot or two, but will make no difference in the end .

SouthCoastBoy

Albermarle said:

DavidT67 said:

LHW99 said:

Dows anyone have examples of how easy different platforms make it to draw down flexibly choosing what is taxable and what is tax free, and/or leaving crystallised funds in the portfolio.  Are some easier than others.

Just on this point, it will depend on the platform. I believe HL keep crystallised and uncrystallised pots separate, whereas other (DIY) platforms keep it as one, but mark the % that has been crystallised. If you use an IFA, they presumably keep track on it for you.

Also HL charge two separate account fees for the SIPP and Drawdown accounts, some other brokers don't. 

As HL charge a % fee then of course they will charge that on all funds, whether you have one pot or two, but will make no difference in the end .

It may make a difference if they are treated as totally separate accounts as the fees have account thresholds.

Albermarle

SouthCoastBoy said:

Albermarle said:

DavidT67 said:

LHW99 said:

Dows anyone have examples of how easy different platforms make it to draw down flexibly choosing what is taxable and what is tax free, and/or leaving crystallised funds in the portfolio.  Are some easier than others.

Just on this point, it will depend on the platform. I believe HL keep crystallised and uncrystallised pots separate, whereas other (DIY) platforms keep it as one, but mark the % that has been crystallised. If you use an IFA, they presumably keep track on it for you.

Also HL charge two separate account fees for the SIPP and Drawdown accounts, some other brokers don't. 

As HL charge a % fee then of course they will charge that on all funds, whether you have one pot or two, but will make no difference in the end .

It may make a difference if they are treated as totally separate accounts as the fees have account thresholds.

Yes that is possible, you would have to look in the small print. I suppose you mean like if you have more than  £250K overall then you move to a lower platform fee, but if you have say £200K in two separate pots you do not qualify.

SouthCoastBoy

Albermarle said:

SouthCoastBoy said:

Albermarle said:

DavidT67 said:

LHW99 said:

Dows anyone have examples of how easy different platforms make it to draw down flexibly choosing what is taxable and what is tax free, and/or leaving crystallised funds in the portfolio.  Are some easier than others.

Just on this point, it will depend on the platform. I believe HL keep crystallised and uncrystallised pots separate, whereas other (DIY) platforms keep it as one, but mark the % that has been crystallised. If you use an IFA, they presumably keep track on it for you.

Also HL charge two separate account fees for the SIPP and Drawdown accounts, some other brokers don't. 

As HL charge a % fee then of course they will charge that on all funds, whether you have one pot or two, but will make no difference in the end .

It may make a difference if they are treated as totally separate accounts as the fees have account thresholds.

Yes that is possible, you would have to look in the small print. I suppose you mean like if you have more than  £250K overall then you move to a lower platform fee, but if you have say £200K in two separate pots you do not qualify.

Yes. I am currently with H&L but am finding there fees quite high so contemplating moving before I go to drawdown.

DavidT67

HL has caps on the platform fees if you avoid unit trusts and stick to shares, bonds and etfs. 

So a one million pension need not pay more than a fifty thousand pound one.

Then one strategy might be to only hold cash in the drawdown account, as that has no charge.

Or maybe move the entire SIPP account into the drawdown account, so that the SIPP is empty except for new contributions ?  Buy maybe there's a downside to that approach?

As regards UFPLS, that has downsides if you want to avoid taking an income and only want the TFLS, but does bypass the drawdown account.

Albermarle

SouthCoastBoy said:

Albermarle said:

SouthCoastBoy said:

Albermarle said:

DavidT67 said:

LHW99 said:

Dows anyone have examples of how easy different platforms make it to draw down flexibly choosing what is taxable and what is tax free, and/or leaving crystallised funds in the portfolio.  Are some easier than others.

Just on this point, it will depend on the platform. I believe HL keep crystallised and uncrystallised pots separate, whereas other (DIY) platforms keep it as one, but mark the % that has been crystallised. If you use an IFA, they presumably keep track on it for you.

Also HL charge two separate account fees for the SIPP and Drawdown accounts, some other brokers don't. 

As HL charge a % fee then of course they will charge that on all funds, whether you have one pot or two, but will make no difference in the end .

It may make a difference if they are treated as totally separate accounts as the fees have account thresholds.

Yes that is possible, you would have to look in the small print. I suppose you mean like if you have more than  £250K overall then you move to a lower platform fee, but if you have say £200K in two separate pots you do not qualify.

Yes. I am currently with H&L but am finding there fees quite high so contemplating moving before I go to drawdown.

Also with HL, some of their discounts/caps have more stringent rules than say a similar platform like Fidelity.
For example both reduce the platform fee when you have over £250K. However with HL it is only on the amount above £250k, whereas Fidelity give you the reduced fee on all of it. They both have caps on fees for exchange traded products, but with HL it is per account ( ISA, SIPP etc ) whereas with Fidelity it is over all funds on the platform.