Which platform for separate crystallised and uncrystallised pots?

michaels

Currently mostly with II but it seems in drawdown you can't have separate crystallised and uncrystallised pots with different invest mixes, nor chose certain current holdings to crystallise.

Any suggestions for platforms that provide this - or do people have a second provider (and set of fees) for their crystallised pots?

ColdIron

HL have two accounts, one for each

Shimrod

michaels said:

Currently mostly with II but it seems in drawdown you can't have separate crystallised and uncrystallised pots with different invest mixes, nor chose certain current holdings to crystallise.

Any suggestions for platforms that provide this - or do people have a second provider (and set of fees) for their crystallised pots?

You can have whatever investment mix you want with ii, as you chose what you want to sell to draw down funds. They have a notional split so you don't have separate crystalised/non-crystalised investments - just a split based on the value of your pension.

Some examples in the link below may make it a bit clearer. I like the flexibility this gives, but appreciate some might want a physical separation of funds for easier management/visibility.

https://www.ii.co.uk/ii-accounts/sipp/income-drawdown/notional-split

michaels

Shimrod said:

michaels said:

Currently mostly with II but it seems in drawdown you can't have separate crystallised and uncrystallised pots with different invest mixes, nor chose certain current holdings to crystallise.

Any suggestions for platforms that provide this - or do people have a second provider (and set of fees) for their crystallised pots?

You can have whatever investment mix you want with ii, as you chose what you want to sell to draw down funds. They have a notional split so you don't have separate crystalised/non-crystalised investments - just a split based on the value of your pension.

Some examples in the link below may make it a bit clearer. I like the flexibility this gives, but appreciate some might want a physical separation of funds for easier management/visibility.

https://www.ii.co.uk/ii-accounts/sipp/income-drawdown/notional-split

But with separate pots you might have high growth assets in the uncrystallised pot so the amount that can be taken tax free in future is increasing and safer assets in the crystallised pot so the amount that will be subject to IT does not grow as much.

EG

1) you split a 400k pot, 200k is crystallised as 50k tfls and 150k that does not grow at all but is subject to income tax, the other 200k uncrystallised grows to 300k allowing eventually 75k TFLS and 225k taxed.

2) joint pot, 50k tfls taken, remainder (same assets as above) grows from 350k to 450k.  Crystallised pot is considered to have grown from 150k to 190k all taxable, uncrystallised is considered to have grown from 200k to 260k so now has 65k tax free.  Tax is now payable on an extra 10k that would have been part of TFLS with separate pots.

DavidT67

ColdIron said:

HL have two accounts, one for each

But note, they charge £200 plus per annum platform fee, for each account, SIPP and SIPP drawdown.

snarffie

michaels said:

But with separate pots you might have high growth assets in the uncrystallised pot so the amount that can be taken tax free in future is increasing and safer assets in the crystallised pot so the amount that will be subject to IT does not grow as much.

EG

1) you split a 400k pot, 200k is crystallised as 50k tfls and 150k that does not grow at all but is subject to income tax, the other 200k uncrystallised grows to 300k allowing eventually 75k TFLS and 225k taxed.

2) joint pot, 50k tfls taken, remainder (same assets as above) grows from 350k to 450k.  Crystallised pot is considered to have grown from 150k to 190k all taxable, uncrystallised is considered to have grown from 200k to 260k so now has 65k tax free.  Tax is now payable on an extra 10k that would have been part of TFLS with separate pots.

I was pretty comfortable with the notional splits that ii do, to the point of thinking that it's a much neater way of doing things v separate pots.  Until you gave your example above.  Maybe I need to have a rethink.  What a pain!

squirrelpie

DavidT67 said:

ColdIron said:

HL have two accounts, one for each

But note, they charge £200 plus per annum platform fee, for each account, SIPP and SIPP drawdown.

They don't automatically charge £200. That's the limit for exchange-traded investments. But it's 0.45% and nothing on cash (except they pay you interest).

Albermarle

Fidelity split the pots ( like HL do ) 
Also they are a bit cheaper than HL.

TheTelltaleChart

michaels said:

But with separate pots you might have high growth assets in the uncrystallised pot so the amount that can be taken tax free in future is increasing and safer assets in the crystallised pot so the amount that will be subject to IT does not grow as much.

I do agree with the general idea that there may be an advantage in investing crystallised and uncrystallised pots differently.

However, this isn't a good argument for the idea. If you really knew that the "high growth" assets would outperform the "safer" assets, then you'd invest 100% of both pots in the "high growth" assets. In reality, there is always a risk that they will underperform. You need an argument for why you'd want to take more risk with a tax-free pot than with a taxable pot.

MK62

snarffie said:

michaels said:

But with separate pots you might have high growth assets in the uncrystallised pot so the amount that can be taken tax free in future is increasing and safer assets in the crystallised pot so the amount that will be subject to IT does not grow as much.

EG

1) you split a 400k pot, 200k is crystallised as 50k tfls and 150k that does not grow at all but is subject to income tax, the other 200k uncrystallised grows to 300k allowing eventually 75k TFLS and 225k taxed.

2) joint pot, 50k tfls taken, remainder (same assets as above) grows from 350k to 450k.  Crystallised pot is considered to have grown from 150k to 190k all taxable, uncrystallised is considered to have grown from 200k to 260k so now has 65k tax free.  Tax is now payable on an extra 10k that would have been part of TFLS with separate pots.

I was pretty comfortable with the notional splits that ii do, to the point of thinking that it's a much neater way of doing things v separate pots.  Until you gave your example above.  Maybe I need to have a rethink.  What a pain!

Bear in mind though that it works the other way too.......if the £200k in the uncrystallised high growth fund were to fall in value, you'd then have less PCLS available than if you had a notional split on your whole pot.........

Nick9967

My Scottish Widows have 2 accounts with one , one crystalized and one not , can choose your investments - retirement planning for uncrystallized and Retirement income for crystalized, i see as a total and separately under one master plan , works fine for me and don't pay anything extra. The only issue with this and SW is i need o call to draw , at the moment can't do it online.