Mechanics of and charges for SIPP UFPLS Withdrawal

DrSparsamkeit · 8 January at 1:53PM

I am fully retired and living off a combination of state pension and defined benefit pensions; these cover both essential and discretionary spending. I also have sufficient cash savings with appropriate access to ensure a smooth cash flow. In addition I have a Standard Life defined contribution pension pot (present value £140,000) to which I no longer make contributions and don't intend to do so in future. I'd like to use this pot for additional discretionary spending by making ad-hoc UFPLS withdrawals; however, it doesn't offer UFPLS so I'm considering moving it to a SIPP provider.

I've attempted to discover the mechanics and charges for ad-hoc UFPLS of AJ Bell (AJB), Hargreaves Lansdown (HL), and Interactive Investor (II) and would appreciate if forumites could check my understanding and fill in any gaps.

The fees appear to be AJB = £350 (0.25% of £140,000), HL = £630 (0.45%), II = £155.88 (12 times £12.99). These appear to be platform fees and I can't find any details of dealing or admin fees which may be required for a UFPLS withdrawal. Which brings me on to the mechanics of UPPLS withdrawal - do I have to sell funds and have platform-held cash available for the withdrawal? Again, none of the SIPP providers appear to explain this on their websites, or maybe my Google-fu is lacking. Surely some forumites have experience of making UFPLS withdrawal with these SIPP providers and can help? It would be very much appreciated.

NoMore · 8 January at 2:06PM

None of them charge for withdrawal.

II have a explanation of their process Taking an UFPLS lump sum payment - ii

squirrelpie · 8 January at 5:10PM

I can only speak about HL on a first-hand knowledge basis. Their fees for funds are indeed 0.45% as you say, but for exchange-traded instruments (shares, ETFs, ITs et al) there is a limit to the fees of £200/year.

For their UFPLS process they have a page that describes the process https://www.hl.co.uk/retirement/ufpls and they also offer a printed guide as mentioned on that page. As @NoMore says, there are no withdrawal fees.

ColdIron · 8 January at 5:14PM

HL don't charge for UFPLS (or drawdown for that matter). The fees you state are annual custody/platform charges not withdrawal charges. That 0.45% only applies to open ended funds, there is a cap of £200 for ITs, ETFs etc

Some will have cash in their account so no sales required, others will have to sell to cash, free for OEICs, £11.95 for others

https://www.hl.co.uk/pensions/sipp/charges-and-interest-rates

tacpot12 · 8 January at 7:55PM

I have my SIPP with AJ Bell. I have a regular monthly UFPLS withdrawal setup with them. If I want to increase this, I just send a secure message and it is increased. My SIPP portfolio generates all the income that I withdraw as dividends, so I don't need to worry about whether there is cash in the SIPP as I keep a cash buffer of about £8000 in there.

If you wanted an irregular and variable amount via UFPLS, I expect AJ Bell could do this for you, but you would have to decide what to sell in order to have the cash to withdraw and you would need to have sold it and have the sale proceeds in the SIPP before you ask them to send the withdrawal. They will send a payslip and confirmation of the Benefit Crystalisation Event (BCE).

incus432 · 8 January at 8:28PM

squirrelpie said:

I can only speak about HL on a first-hand knowledge basis. Their fees for funds are indeed 0.45% as you say, but for exchange-traded instruments (shares, ETFs, ITs et al) there is a limit to the fees of £200/year.

For exchange traded instruments AJBell cap fees at 120 pa.