AJ bell drawdown

BurkieDaddyo

I am about to move my pension into drawdown and just noticed my current provider only offers 4 portfolios for drawdown accounts and none of these are really what I’m looking for.

so I’m looking to move over to AJ Bell as they seem to offer their full list of portfolio for drawdown accounts use.  Has anyone got any experience of using them in drawdown? 

From reviews and what info I’ve read they seem pretty good, but I’ve just started looking so would appreciate any feedback.

tacpot12

I use them for drawdown and have found them to be good. Their customer service is responsive, and there is not too much papework involved. 

The only downside I've found is that cash is taken out of the SIPP for benefit payments about 7 days before the payment arrives in my bank account. This means that you are losing out some interest. I've no idea why AJ Bell need this long to process the withdrawal, but they do. 

Linton

Mrs L's SIPP is with AJBell. We find that they do a good job with zero hassles and a reasonable charge.

The gap between taking the money and getting it paid out I think is pretty normal.  They and the other platforms I have used run the payroll once a month.  To minimse disruptions with the run it is important for the cash to be available and secure well in time.

BurkieDaddyo

Thanks for the comments above,  when you talk about a gap between taking the money out,  am I right that you can’t just ask them to “send me 50k a year broken down monthly”  I think I read somewhere you have to do this yourself, so either -

sell however much you want each month and send it to yourself every month manually (seems like a bit of a hassle)

or go on every 3/4 months and sell more to pay yourself a pension each month for that time period (but the losing even more profit)

hope that makes sense haha

tacpot12

You have to have cash in your SIPP when they want to withdraw the money, so at least 7 days before the date you have asked for it to be paid. 

So, you need to either sell some investments each month, or have assets that pay dividends. You don't have to send it to yourself. AJ Bell will pay a fixed amount monthly, and I can just send a seucre message when I want to increase this, which I do about every 18 months or so. 

I took the option of investing for dividend income. All my investments pay dividends and I also maintain a cash 'buffer' in the SIPP of about six months of withdrawals, to there is always cash in my SIPP to pay the withdrawls with. AJ Bell pay interest on the cash.

I don't know if there are any SIPP providers that allow you set up regular SELL trades to fund withdrawls.

dunstonh

I don't know if there are any SIPP providers that allow you set up regular SELL trades to fund withdrawls.
On the intermediary side, there are a number of providers that will auto-sell to fund withdrawals.   However, the method you are using with inc units and a cash buffer is nice and clean and helps with sequencing risk (depending on the size of the short term buffer)

Sarahspangles

BurkieDaddyo said:

Thanks for the comments above,  when you talk about a gap between taking the money out,  am I right that you can’t just ask them to “send me 50k a year broken down monthly”  I think I read somewhere you have to do this yourself, so either -

sell however much you want each month and send it to yourself every month manually (seems like a bit of a hassle)

or go on every 3/4 months and sell more to pay yourself a pension each month for that time period (but the losing even more profit)

hope that makes sense haha

Do you actually need a monthly deposit of pension? I initially assumed I did, but now I plan to take an initial payment eight months after retiring, which will prompt HMRC to set up a tax code, and then the rest of my drawings for the tax year next March. The money earmarked for this is in a short term money market fund, I’ll need to sell two batches. It’s currently yielding a bit more than I get in savings interest, and beating inflation.

In the meantime I have maturing regular savers to top up cash flow. I don’t know what I’ll do long term but I think I need to spend from whatever pot is earning me least.

BurkieDaddyo

Thanks all, put my mind at rest and I’ll be hitting the transfer button 👍

Scarum

I'm way off accessing a SIPP and I invest with AJ Bell but the way I see it is:

1/ you plan to crystallise a portion of your SIPP to cover one year of monthly direct debits.

2/ the taxable portion (75%) of the crystallised SIPP is paid via PAYE at the monthly amount agreed with your SIPP provider, you may pay income tax on this income depending on any other income you may have.

3/ The tax free lump sum (25%) of the crystallised portion is paid as one separate amount (and I am guessing this is not transferred via PAYE because it is tax free).

4/ Whether you need to sell SIPP funds to cash to accommodate the crystallised event I do not know but for a partial crystallised event to supply enough income for 1 year, it makes sense to me to sell enough funds to cash to supply the 12 months drawdown, plus the TFLS.

If the SIPP provider will auto convert funds to cash to provide the monthly income for the drawdown plan, then parking the crystallised amount in to a money market fund might be a better option than cash as a money market fund may provide a better rate of return (even if fees are involved, as they are with AJ Bell at £1.50 per trade).  Personally I wouldn't want to "wing it" and keep a partially crystallised portion of a SIPP required for a drawdown plan in volatile funds.

Albermarle

tacpot12 said:

You have to have cash in your SIPP when they want to withdraw the money, so at least 7 days before the date you have asked for it to be paid. 

So, you need to either sell some investments each month, or have assets that pay dividends. You don't have to send it to yourself. AJ Bell will pay a fixed amount monthly, and I can just send a seucre message when I want to increase this, which I do about every 18 months or so. 

I took the option of investing for dividend income. All my investments pay dividends and I also maintain a cash 'buffer' in the SIPP of about six months of withdrawals, to there is always cash in my SIPP to pay the withdrawls with. AJ Bell pay interest on the cash.

I don't know if there are any SIPP providers that allow you set up regular SELL trades to fund withdrawls.

Regarding the comment in bold.
What happens if there is not enough cash /you forget?
Is the payment cancelled, or do they charge you for cashing in holdings themselves on your behalf ?

Hoenir

tacpot12 said:

The only downside I've found is that cash is taken out of the SIPP for benefit payments about 7 days before the payment arrives in my bank account. This means that you are losing out some interest. I've no idea why AJ Bell need this long to process the withdrawal, but they do. 

Two working days for AJ Bell to process the entire "payroll" run. Two non working days lost at weekends.  Three days working days from when the BACS run is initiated to when it arrives in your bank account.