Vanguard - Moving funds to drawdown and change to II

NoMore

With II, it's up to you to ensure there is enough cash available for any withdrawal, if not they don't proceed with the withdrawal. Where the cash comes from is up to you on what you sell.

Yes they do UFPLS and FAD. 

The important thing to understand as LHW99 says they use a notional split for tracking crystallised/uncrystallised portions, not two different accounts.

Notional split - ii

Some people don't like this as they prefer to be able to control what investments are where.

MK62

ian16527 said:

I have posted about this before last year, but I was given some incorrect information by Vanguard then.

I usually keep 2-3 years money in a STMMF which I would like to use for drawdown, in case of market fluctuations. 

When you go through the drawdown process you specify which funds or cash to move the money to, but you cannot select which funds to take the money from in the Pre retirement part of the account.

So I have had issues for 3 years going through this process. They will take the TFLS out of cash or divest investments - which is fair enough - but then will divest from all the funds to move the 75% taxable part over to drawdown. There was a problem last year where they lost £200 in the process ( been told it was probably human error).

Thinking of changing to II - Anyone use then for drawdown? The Fund value is only £150k so will be slightly more expensive than Vanguard. 

Can you not use an annual UFPLS instead of drawdown?  (PS.....Vanguard call it a Single Cash Lump Sum)

ian16527

MK62 said:

ian16527 said:

I have posted about this before last year, but I was given some incorrect information by Vanguard then.

I usually keep 2-3 years money in a STMMF which I would like to use for drawdown, in case of market fluctuations. 

When you go through the drawdown process you specify which funds or cash to move the money to, but you cannot select which funds to take the money from in the Pre retirement part of the account.

So I have had issues for 3 years going through this process. They will take the TFLS out of cash or divest investments - which is fair enough - but then will divest from all the funds to move the 75% taxable part over to drawdown. There was a problem last year where they lost £200 in the process ( been told it was probably human error).

Thinking of changing to II - Anyone use then for drawdown? The Fund value is only £150k so will be slightly more expensive than Vanguard. 

Can you not use an annual UFPLS instead of drawdown?  (PS.....Vanguard call it a Single Cash Lump Sum)

Yes possibly, but I use the Vanguard drawdown payments to pay my tax on so if I did an UFPLS, then would I get hit with a big tax bill? 

Also I would have to do a bit of admin. I like to get a regular monthly amount and it helps me budget but I still think they would sell the investments for the taxable part 

ian16527

NoMore said:

With II, it's up to you to ensure there is enough cash available for any withdrawal, if not they don't proceed with the withdrawal. Where the cash comes from is up to you on what you sell.

Yes they do UFPLS and FAD. 

The important thing to understand as LHW99 says they use a notional split for tracking crystallised/uncrystallised portions, not two different accounts.

Notional split - ii

Some people don't like this as they prefer to be able to control what investments are where.

Thanks for that info. 

MK62

ian16527 said:

MK62 said:

ian16527 said:

I have posted about this before last year, but I was given some incorrect information by Vanguard then.

I usually keep 2-3 years money in a STMMF which I would like to use for drawdown, in case of market fluctuations. 

When you go through the drawdown process you specify which funds or cash to move the money to, but you cannot select which funds to take the money from in the Pre retirement part of the account.

So I have had issues for 3 years going through this process. They will take the TFLS out of cash or divest investments - which is fair enough - but then will divest from all the funds to move the 75% taxable part over to drawdown. There was a problem last year where they lost £200 in the process ( been told it was probably human error).

Thinking of changing to II - Anyone use then for drawdown? The Fund value is only £150k so will be slightly more expensive than Vanguard. 

Can you not use an annual UFPLS instead of drawdown?  (PS.....Vanguard call it a Single Cash Lump Sum)

Yes possibly, but I use the Vanguard drawdown payments to pay my tax on so if I did an UFPLS, then would I get hit with a big tax bill? 

Also I would have to do a bit of admin. I like to get a regular monthly amount and it helps me budget but I still think they would sell the investments for the taxable part 

You'd get a tax bill, but it's fairly straightforward to claim this back (or part of it) using an online P55 form (paper is available too but takes longer)......takes about 6-8 weeks currently AFAIK.
As for budgeting, using an annual UFPLS, I pay that into an EA account and just take from that each month......but monthly budgeting is a personal thing and we all have our ways.

As for II (I'm with them but don't use drawdown atm......also with Vanguard, but haven't withdrawn at all from there yet), you might need to pay a dealing fee each month to sell enough of the STMMF to cash for each monthly drawdown.......and further dealing fees to move money from your other investments to the STMMF to replenish that.....
The notional split thing is......an acquired taste I think......I'm used to it now, but I came from a two pot platform (HL), and tbh, would probably prefer that now, but it's not a deal breaker for me as II is a fair bit less expensive for my pot and the way I do things.....

RoysV

I started this thread last year  https://forums.moneysavingexpert.com/discussion/6593909/sipp-withdrawal#latest      I'm just about to go through the process again so I'll see what happens. 
I must admit I'm not impressed with the way Vanguard have changed their rules since I made my first withdrawal.

ian16527

RoysV said:

I started this thread last year  https://forums.moneysavingexpert.com/discussion/6593909/sipp-withdrawal#latest      I'm just about to go through the process again so I'll see what happens. 
I must admit I'm not impressed with the way Vanguard have changed their rules since I made my first withdrawal.

Hi RoysV,
I commented on your post last year.

I am afraid its no different this year and they still sell pro rata from all funds. Just cancelled the first drawdown application this year and put another complaint in.

I did get £100 back last year from a complaint but I was still £100 down. It seems you cannot avoid this process however stupid or illogical it appears. 

The annoying part is that you can do it for the TFLS portion but keeping that in cash, so selling some STMM funds but for the remaining 75% you are stuck. 

If we all put complaints in it may be listened to but not holding my breath. I am thinking of definitely going to II although it will work out cheaper slightly, it will allow me to sell what funds I want to be sold hopefully.

ian16527

NoMore said:

With II, it's up to you to ensure there is enough cash available for any withdrawal, if not they don't proceed with the withdrawal. Where the cash comes from is up to you on what you sell.

Yes they do UFPLS and FAD. 

The important thing to understand as LHW99 says they use a notional split for tracking crystallised/uncrystallised portions, not two different accounts.

Notional split - ii

Some people don't like this as they prefer to be able to control what investments are where.

Reading into this, I would have to sell to cash once a year to fund my drawdown. 

NoMore

ian16527 said:

NoMore said:

With II, it's up to you to ensure there is enough cash available for any withdrawal, if not they don't proceed with the withdrawal. Where the cash comes from is up to you on what you sell.

Yes they do UFPLS and FAD. 

The important thing to understand as LHW99 says they use a notional split for tracking crystallised/uncrystallised portions, not two different accounts.

Notional split - ii

Some people don't like this as they prefer to be able to control what investments are where.

Reading into this, I would have to sell to cash once a year to fund my drawdown. 

You can just sell a few days each month before you require the funds. No automatic option for this, but I don't think any provider has an automatic option that you desire, where they sell from specific funds you have picked when required, I think most will either do it the way vanguard does it or require you yourself to sell. Others will be able to confirm.

RoysV

ian16527 said:

RoysV said:

I started this thread last year  https://forums.moneysavingexpert.com/discussion/6593909/sipp-withdrawal#latest      I'm just about to go through the process again so I'll see what happens. 
I must admit I'm not impressed with the way Vanguard have changed their rules since I made my first withdrawal.

Hi RoysV,
I commented on your post last year.

I am afraid its no different this year and they still sell pro rata from all funds. Just cancelled the first drawdown application this year and put another complaint in.

I did get £100 back last year from a complaint but I was still £100 down. It seems you cannot avoid this process however stupid or illogical it appears. 

The annoying part is that you can do it for the TFLS portion but keeping that in cash, so selling some STMM funds but for the remaining 75% you are stuck. 

If we all put complaints in it may be listened to but not holding my breath. I am thinking of definitely going to II although it will work out cheaper slightly, it will allow me to sell what funds I want to be sold hopefully.

Yes I read your comments last year. I wonder why they changed it? I may have mentioned it before but for some reason I just couldn't get my head around the notional split of II which is why I went to Vanguard.
As they don't seem to be going to change it has anyone on the forum got any cunning plans on how to get around this dilemma the best way?