A J Bell SIPP - Taxable Element of Crystallised Funds - is a volatile value usual?

Albermarle

phlebas192 said:

FIREDreamer said:

HL works well for me. And using ETF and Investment Trusts keeps platform fees capped at £45 pa for an ISA and £200 pa for a SIPP. SIPP and Drawdown SIPP are charged for separately as two separate SIPPs.

So potentially £400 pa in fees if you have relatively modest amounts in both uncrystallised & drawdown pots. Compare that to £120 max for AJ Bell if also investred in ETFs & ITs. So whilst HL would likely better suit the way the OP wants things to work, it will be at a cost.

OP - if you stay with AJ Bell then one option would be to use UFPLS rather than moving funds into flexi-drawdown. Taking £7.5k in UFPLS would give you an immediate £1,875 tax free and £5,625 taxable so no risk of that amount reducing. The downside is that you will be taxed on that withdrawal and will need to claim the tax back - but in the meantime you can "pay" yourself the monthly £470 amount from the withdrawn amount. Or you could do several smaller UFPLS withdrawals during the year. AJ Bell won't do automatic monthly UFPLS but I don't think there's a limit on how many you can request manually.

Fidelity have a platform wide cap of £90 pa covering ISAs and SIPPs, so cheaper than HL, and even AJ Bell. However like those other platforms it only applies to investments that can be traded on the stock exchange. ETF's , shares, Investment Trusts.
Fidelity charge for funds is 0.35% . Cheaper than HL but more than AJ Bell. 
They do keep separate crystallised and uncrystallised pots.
They regularly offer cashback for transfer in, but their most recent offer has just ended. 

Triumph13

DairyQueen said:

I am now in the peculiar (to me) position of having less cash in my drawdown account than would have been available on the date of the crystallisation event

This isn't strictly true as your cash isn't in a drawdown account, it's just in your SIPP, and the amount of cash in your SIPP is exactly what you thought it would be.

Because they don't operate separate pots, instead there are effectively two entirely separate rules to be met when you take money out.  Rule 1 is you need enough cash for the withdrawal.  Rule 2 is you need enough crystallised funds for the withdrawal.

There are lots of ways around the issue besides using UFPLS.  For instance, you could just crystallise another £20k and park the £5k TFLS in a S&S ISA in the same investments. The £5k would have to go in and out of cash, but you end up with the crystallised portion well over your cash amount and you don't have to worry about it for a couple of years.  Probably simpler than moving platforms if you are otherwise happy.

Scarum

Triumph13 said:

There are lots of ways around the issue besides using UFPLS.  For instance, you could just crystallise another £20k and park the £5k TFLS in a S&S ISA in the same investments. The £5k would have to go in and out of cash, but you end up with the crystallised portion well over your cash amount and you don't have to worry about it for a couple of years.  Probably simpler than moving platforms if you are otherwise happy.

I see this as a rather tax inefficient way to gain an extra a proportion of cash to drawdown from.

I don't like the sound of proportional crystallised/uncrystallised funds.  Suppose a pension that is already in drawdown is invested 60% in equities (along with with 30% as bonds and 10% as cash).  There is a 40% market crash in equities and the % proportion of cash available for drawdown shrinks, even though the amount of cash does not.  Crazy!

I am thankful this AJ Bell process has been brought to our attention though as I have a SIPP is with AJ Bell.  I am planning on accessing it in 6 years time so rather than going the drawdown route I am now looking at one UFPLS in March to budget one year, or simply moving to Fidelity or HL.

phlebas192

Scarum said:

Triumph13 said:

There are lots of ways around the issue besides using UFPLS.  For instance, you could just crystallise another £20k and park the £5k TFLS in a S&S ISA in the same investments. The £5k would have to go in and out of cash, but you end up with the crystallised portion well over your cash amount and you don't have to worry about it for a couple of years.  Probably simpler than moving platforms if you are otherwise happy.

I see this as a rather tax inefficient way to gain an extra a proportion of cash to drawdown from.

I don't like the sound of proportional crystallised/uncrystallised funds.  Suppose a pension that is already in drawdown is invested 60% in equities (along with with 30% as bonds and 10% as cash).  There is a 40% market crash in equities and the % proportion of cash available for drawdown shrinks, even though the amount of cash does not.  Crazy!

I am thankful this AJ Bell process has been brought to our attention though as I have a SIPP is with AJ Bell.  I am planning on accessing it in 6 years time so rather than going the drawdown route I am now looking at one UFPLS in March to budget one year, or simply moving to Fidelity or HL.

I assume you mean "a pension that is partly in drawdown" since a "pension that is already in drawdown" only has a single pot whether it is notionally or physically split!

There is another way of loking at it. If your investments are generating a cash flow (eg dividends and coupons) then the investments in the uncrystallised portion are topping up the overall cash and that cash can be taken from the drawdown portion. Hence there's no need to keep as much in cash as might be necessary with separate pots leading to better overall returns.