HL Slow / Busy This Year

Roger175

SVaz said:

Why would anyone use UFPLS if it’s such a faff, when flexi drawdown can all be done online and has the same result of 25% tfls and 75% taxable either in a lump or monthly?  

I did my first UFPLS draw a few weeks ago with A J Bell - all done on-line and money received within a few days. Couldn't fault them.

Sarahspangles

SVaz said:

Why would anyone use UFPLS if it’s such a faff, when flexi drawdown can all be done online and has the same result of 25% tfls and 75% taxable either in a lump or monthly?  

It seems like HL make it a faff, AJ Bell and possibly others are set up to do this online. The main issue with either route is that taking taxable income for the first time at any time other than March brings HMRC faff

DavidT67

SVaz said:

Why would anyone use UFPLS if it’s such a faff, when flexi drawdown can all be done online and has the same result of 25% tfls and 75% taxable either in a lump or monthly?  

They are two different approaches with different outcomes and tax implications.

UFPLS you don't crystallise anything you receive 1/4 Tax Free Cash and 3/4 taxable one-off payment.  If you are a non-earner, you might do an annual UFPLS to utilise your personal tax allowance, which would otherwise be wasted.  It's annoying with UFPLS that your payment is taxed and then you need to reclaim via P800 online. But that only takes two weeks, same as the UFPLS application.

FAD you take 1/4 TFC and then 3/4 is crystallised, you do not immediately receive that crystallised amount, and it remains invested with no tax on interest and gains. In normal times, that takes two weeks also. 

FAD is useful if you are still earning, but want to consume some of your £268K of LSA and have an immediate need for a lump sum, i.e. paying off mortgage.  Whether and When you take an income from your crystallised pot is a separate decision point.

dunstonh

SVaz said:

Why would anyone use UFPLS if it’s such a faff, when flexi drawdown can all be done online and has the same result of 25% tfls and 75% taxable either in a lump or monthly?  

FOr most providers it is not a faff.   I use UFPLS far more than drawdown.   Indeed, regular UFPLS is by far the most common method used and for most providers (albeit these are intermediary providers) its no more work than drawdown.

Sarahspangles

DavidT67 said:

UFPLS you don't crystallise anything you receive 1/4 Tax Free Cash and 3/4 taxable one-off payment.  If you are a non-earner, you might do an annual UFPLS to utilise your personal tax allowance, which would otherwise be wasted.  It's annoying with UFPLS that your payment is taxed and then you need to reclaim via P800 online. But that only takes two weeks, same as the UFPLS application.

I understand that to avoid having to reclaim it’s possible to take a small UFPLS which will trigger issue of a tax code but incur no tax, and then a larger final one in March.

molerat

Tax has been deducted so will pay out this afternoon. Been doing this for a few years and this is the longest ever.

SouthCoastBoy

I intend to use UFPLS, as I have no need for the large lump sum, so draw out the annual amount that is required once a year by the end of March. Didnt realise you couldn't do it online at H&L, so may look at moving my pension before I start UFPLS.

molerat

Not on line is not really that much of a problem, normally all done within a week of submitting the form which is received the day after filling in the on line questions.  If you have not taken anything yet it would be better to take an under £1K taxable amount early on in the year so you can get the ID & bank account proofs and tax code sorted before going for a March payment.

Albermarle

SouthCoastBoy said:

I intend to use UFPLS, as I have no need for the large lump sum, so draw out the annual amount that is required once a year by the end of March. Didnt realise you couldn't do it online at H&L, so may look at moving my pension before I start UFPLS.

Most SIPP providers seem to be improving with these items, but I guess it takes time, IT upgrade etc.
So maybe by the time you take your first UFPLS, HL will have upgraded their procedures, especially as it will probably be a few years away yet 

molerat

Real Time Reporting really is as it says on the tin, payment showing in tax account already !