SIPP drawdown fund

Vanwhiskey

Hi all 
im currently in sipp drawdown and i want to just take monthly income from one fund only.
i have been taking profits from across my portfolio but I now want to use 1 fund first to save cost.

i am stuck between holding cash 3.5 % interest on my a j bell sipp, or buying a short term money fund like a blackrock liquid stl premier fund.
 I am taking dividends to complement my drawdown as all my funds are inc funds.i currently own 7 funds.

£20-30k in cash plus my divs would give me 2 years drawdown.

Or should I continue  picking monthly income from across my portfolio at a cost.

 Note this portfolio is fully crystallised. 

dunstonh

Or should I continue  picking monthly income from across my portfolio at a cost.

It depends on your strategy.   However, 2 years' worth of income in platform cash and 3 years' worth in STMM and using income units across the board should give you 6-7+ years' worth of withdrawals without the need to sell units.       You can then replenish the cash and/or STMM when markets are at higher points.

Vanwhiskey

Thank u .. so you believe holding both cash and STMM together? Maybe Leaning more towards STMM if interest rates continue to drop.
ive looked at wealth managers position and they don’t seem to hold any cash at all 100% invested,but I guess that’s for there own benefit and not the clients.

dunstonh

Vanwhiskey said:

Thank u .. so you believe holding both cash and STMM together? Maybe Leaning more towards STMM if interest rates continue to drop.
ive looked at wealth managers position and they don’t seem to hold any cash at all 100% invested,but I guess that’s for there own benefit and not the clients.

It depends. If the platform cash rate is better than STMM then you don't need to.  Or some platforms have cash products available on them that can be attractive.  However, if the platform cash rate is poor, then limiting the platform cash to 12-24 months is better.

ive looked at wealth managers position and they don’t seem to hold any cash at all 100% invested,but I guess that’s for there own benefit and not the clients.

I don't know the context of wealth manager in this respect as its a phrase that can mean different things.  Indeed, as an IFA, some people refer to us as wealth managers.  A discretionary portfolio manager could also be a wealth manager but they tend to work with IFAs and its the IFA that controls the splits between cash, STMM and the wider portfolio that the discretionary manager controls.   If it's a tied agent offering, such as SJP, then that is because their products are more limited in functionality than IFA or DIY platforms and they use ACC units.

Vanwhiskey

Thank you for your time very interesting very much appreciated