Fidelity selling units to cover charges.

Shylock

Spouse used a Fidelity SIPP to amalgamate several small pension pots into one circa £25k, all invested into one of their Managed Funds.
She has had no cash in the Cash Account so Fidelity have been selling units to cover their charges.
Am I right in presuming that means that pension is now "crystalized" (she's over 55) .
If so what are the repercussions for her for the Fidelity SIPP  (presumably affects Tax Free PCLS?), a seperate untouched Nest pension pot she has but no longer pays into and her current employment local government CARE Pension Scheme she's still paying in to?

Thanks

leosayer

Buying and selling shares within a SIPP is not crystallisation.

NoMore

Paying fees from within pension does not crystallise the pension or selling investments to cash to pay fees. 

It has no effect on any of your other pensions. 

Generally paying fees from within the pension is the best idea because you save on the tax. Eg £100 fee has only cost you 80 pound in the pension. Paying outside would cost you the full £100. 

I

Sarahspangles

Shylock said:

Spouse used a Fidelity SIPP to amalgamate several small pension pots into one circa £25k, all invested into one of their Managed Funds.
She has had no cash in the Cash Account so Fidelity have been selling units to cover their charges.
Am I right in presuming that means that pension is now "crystalized" (she's over 55) .
If so what are the repercussions for her for the Fidelity SIPP  (presumably affects Tax Free PCLS?), a seperate untouched Nest pension pot she has but no longer pays into and her current employment local government CARE Pension Scheme she's still paying in to?

Thanks

If she pays a significant trading charge every month it might be cheaper to hold some cash. Interest on cash held, less potential loss of investment income - versus - trading charges.

Shylock

NoMore said:

Paying fees from within pension does not crystallise the pension or selling investments to cash to pay fees. 

It has no effect on any of your other pensions. 

Generally paying fees from within the pension is the best idea because you save on the tax. Eg £100 fee has only cost you 80 pound in the pension. Paying outside would cost you the full £100. 

I

Thanks, thats reassuring.  I asked the question because Fidelity had a pop-up warning alongside her zero cash balance suggesting she paid cash in othewise by selling investments her tax free lum sum may be reduced.  I suppose strictly speaking they're correct as its reucing her overall pot vaue, albeit by a tiny amount.

Albermarle

Fidelity usually encourage you to pay charges from the separate’ cash management account’
However if you try to transfer cash from your SIPP to this account they will not allow it, if it is the first ‘withdrawal’ from your Sipp, without going through some hoops first.
Then if you do nothing, they transfer money from your Sipp to that account and take their fees that way.
A but illogical really.

squirrelpie

Sarahspangles said:

Shylock said:

Spouse used a Fidelity SIPP to amalgamate several small pension pots into one circa £25k, all invested into one of their Managed Funds.
She has had no cash in the Cash Account so Fidelity have been selling units to cover their charges.
Am I right in presuming that means that pension is now "crystalized" (she's over 55) .
If so what are the repercussions for her for the Fidelity SIPP  (presumably affects Tax Free PCLS?), a seperate untouched Nest pension pot she has but no longer pays into and her current employment local government CARE Pension Scheme she's still paying in to?

Thanks

If she pays a significant trading charge every month it might be cheaper to hold some cash. Interest on cash held, less potential loss of investment income - versus - trading charges.

Or hold some funds/shares that pay regular dividends, sufficient to pay the charges (e.g. 'income' funds rather than 'accumulation' funds)

Somebody

Not Fidelity but Vanguard where I hold some Short Term Money Market income funds so they take the fees from the income generated every quarter.  In between, I use the income to top up the other accumulation funds I hold.