Which platform for separate crystallised and uncrystallised pots?

TheTelltaleChart

Pat38493 said:

As far as I can tell, even if you ignore the difference between ISA, Drawdown, UC, and just set allocation target at the gross level, you won’t get an error greater than 4-5%.

The differences are smaller between different kinds of pension pots. To see a bigger difference, compare ISA to drawdown pot, especially at higher tax rates.

E.g. £500k ISA in equities, £500k drawdown pot in bonds; so is that a 50:50 portfolio?

With 0% tax on pension withdrawals, yes, of course.

With 20% tax, net value of drawdown pot is £400k, so it's 55.56% equities.

With 40% tax, net value is £300k, so it's 62.5% equities.

With 45% tax, net value is £275k, so it's 64.52% equities.

So it's possible to get errors over 10% at higher tax rates.

But you're right that in many cases, this is overthinking it; and having and sticking to a rebalancing strategy is more important than these details.

TheTelltaleChart

michaels said:

Hmm. Should we also be adjusting pot valuations for (potential) inheritance tax?!

Do you have far more money than you'll ever need, and are effectively investing for the benefit of your heirs, and have picked an investment strategy to suit their needs, not yours (and have taken into account any investments they already hold in their own names)?

If no to the above, then no.

If yes, then perhaps. Though more likely that would be a reason to give away assets now.

TheTelltaleChart

Triumph13 said:

TheTelltaleChart said:

Though we all tend to imagine that other people have vaguely comparable finances grasp of algebra to ourselves, when in fact most, are either a lot poorer or a lot richer  definitely do not.

 

Fixed that for you 

I'm hearing that some people don't even enjoy algebra. Hard though this is to believe!