Crystallised v Uncrystallised pension

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81956523#Comment_81956523

With HL , if you are holding OEICs as your investments, then the charge is a % of your total funds. So does not matter if you have one or two accounts.

However if you are holding ETF's ; shares or investment trusts, then there is a cap on the fees. However this cap applies per account, so in this case you would be paying 'double fees'

Fidelity also split crystallised and uncrystallised funds into different accounts. However their ETF/shares/IT cap covers the platform so no ' double fees' .

As we know every platforms charging structure is a bit different.

EverythingCounts

https://forums.moneysavingexpert.com/discussion/comment/81956629#Comment_81956629

This is something I’m putting a lot of thought into, I want to minimise the tax I pay every year on my pension and the PA will be crucial to this.

Effectively at 67 the state pension wipes out the PA, so you’ll pay tax on any private pension income. So it’s those years before 67 where I’m looking to see how I can best make use of the PA, still not sure exactly when I’ll stop working but if it’s late 50s there’s a good few years to play with.

Sarahspangles

https://forums.moneysavingexpert.com/discussion/comment/81957958#Comment_81957958

I’m in that position. I retired (probably) at 57. I have two tax years when I can draw £16760 from my SIPP tax free - a UFPLS of £12570 taxable, within my personal allowance, plus £4190 tax free. I also get a useful £5k starter savings allowance on top of the £1000 personal savings allowance. From the tax year in which I turn 60, when the first of my workplace pensions starts, I will become a taxpayer again and lose the starter savings allowance, so I’m making sure I use my ISA allowance. I’m aiming to run down my SIPP by the time I’m 67.

They say ‘Don’t let the [tax] tail wag the dog’ but it’s certainly worth being aware of the gotchas, like ending up paying higher rate tax because you want or need to take a larger amount from a pension in a single year. Or holding too much in savings outside a tax wrapper, and paying tax on the interest. My partner was caught like that, as he took a pension lump sum and then received an inheritance in the same year. He hadn’t used his ISA allowance for a couple of years prior, because he only looked at the interest rate.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81958458#Comment_81958458

£12570 + £4190 = £16,760 , not £17,670 ( I guess you just jumbled the numbers up 😀)

Sarahspangles

https://forums.moneysavingexpert.com/discussion/comment/81958484#Comment_81958484

Well spotted - have edited. Yes, more coffee was needed. I’m doing my partner’s tax return now, send hopes and prayers!

Moonwolf

https://forums.moneysavingexpert.com/discussion/comment/81956473#Comment_81956473

Although my Standard Life Pension, while it doesn’t support UFPLS does allow me to draw down £500 a month tax free and £1500 a month taxable, it is practically UFPLS but not quite. They did insist on my first payment being all tax free though.

A lot of older pension providers will have different processes depending where the pension came from, and possibly depending on the value of the pension.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81958639#Comment_81958639

I think in the past you had to withdraw all the tax free with SL, before taking any taxable. Sounds like that has changed, which is good.

Moonwolf

https://forums.moneysavingexpert.com/discussion/comment/81958755#Comment_81958755

I would have transferred £400k to a different provider if they hadn’t supported it, multiply that by a few hundred pensions and I suspect the economics influenced it.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81958841#Comment_81958841

I had a dispute with them over charges, during which I mentioned Vanguard, II etc and I ended up with a lower charge than before !

EverythingCounts

https://forums.moneysavingexpert.com/discussion/comment/81958458#Comment_81958458

What’s the £5k starter savings allowance that you mention? How do you get this? And you lose this when you pay tax again?