UFPLS regular automatic monthly payment possible?

mrklaw

Triggered by a recent Diane Sullivan video - warning that some providers aren’t flexible with UFPLS and often FAD is simpler as its a more embedded setup in slow moving pension providers.

I don’t know that I’m needing to take a monthly withdrawal but I’d like the flexibility to choose. But trying to understand how the process works by googling or even visiting different providers is almost impossible. They mostly give you a brief description of what UFPLS is, but not how their systems work. Are there platforms you’re aware of that are good (or bad so I can add to the avoid list) for UFPLS in particular?

I’m hopefully 3 years out from retirement and I’d wnat to be on the preferred platform pretty soon so this is homework I want to do now if possible.

bonus points: long shot this one, but do any providers let you set up ‘pots’ like monzo so you can earmark funds for different tasks? We are wanting to reserve around 100k as a ‘self life insurance’ fund which isn’t to be touched until 75 and then it can go to the kids. would be nice to have it visibly separated although I can track it in excel if needed

NoMore

Automatic monthly ufpls does not appear to be available on the diy platforms. Only advised platforms seem to have it.

You have to manually apply every month.

FAD can be setup automatically but some platforms will require you to make sure there is enough cash available to provide the amount so you still need to manually intervene every month.

leosayer

I'm not aware of any platforms that allow either of the things you are asking.

As I understand it, UFPLS was created in legislation to allow one-off pension payments for schemes that didn't have the ability to do FAD. So it was never created for the purpose you (understandably) want.

Having said that, it's surely not a huge inconvenience to (for example) crystallise once a year, take the tax free cash and set your monthly taxable income amount.

It's hard enough selecting a platform with all the different holding and transaction charges, service levels, investment universe etc. without bringing even more factors into it.

dunstonh

UFPLS regular automatic monthly payment possible?

It is the most common method I use.

Virtually every adviser platform/provider offers it. However, virtually every DIY platform/provider does not.

but do any providers let you set up ‘pots’ like monzo so you can earmark funds for different tasks?

Again, there are adviser platforms that allow this. I cannot speak for DIY platforms though. I use it for clients operating bucketing strategies or, like you are after, where amounts are specified for a purpose.

mrklaw

intresting. I’m confused as I assumed UFPLS is ideally suited to regular income with built in tax reduction through the tax free portion. Whereas FAD felt more lump sum oriented as you normally (I think?) get only the tax free by default and the taxable moves to crystallisation so requires a second pass to withdraw that. I’m very unlikely to want to pull tax free only every month.

I get that UFPLS is newer so may be less supported though.

so do most people do UPFLS quarterly/annually then? I’ll have a cash buffer I can use for regular income (although currently thats’ planned to be in MMF inside the pension, maybe I need to draw it out into an ISA) and then top that up at the end of the tax year with a single UFPLS withdrawal in March

Albermarle

so do most people do UPFLS quarterly/annually then? 

Yes,( or biannually) and keep the funds in a easy access savings account.

I think a couple of DIY platforms, have made UFPLS withdrawals after the initial one easier/quicker to organise, but I can not remember which ones.

warning that some providers aren’t flexible with UFPLS and often FAD is simpler as its a more embedded setup in slow moving pension providers.

I think the problem is the rules the providers have to follow, rather than them being necessariy 'slow moving'. When you first withdraw from a DC pension, the provider is obliged to ask you various questions, along the lines of ' by withdrawing too much you might run out earlier than expected' and various similar warnings . So you hopefully know what you are doing and if you do not, then the provider has covered their backside.

When you set up FAD, you only have to go through this process once. However each UFPLS withdrawal is seen as a separate event, and you have to go through this questionnaire type process again.

If a client has a financal advisor, it is assumed that the advisor has informed the client on these issues, so no need for the provider to do it every time.

I think that is how it works anyway.

NoMore

if you really want a regular monthly income from the pension directly, then using fad is fine. You take the tax free cash up front then just draw your monthly taxable amount from the crystallised portion every month. Most (all?) providers who have fad will do this, however as I said earlier, you may need to leave the part you wish to withdraw each month in cash from the start, if you want it to be truly automatic and not have to do any maintenance like selling holdings to fund the withdrawal.

GrumpyDil

However, some people might want to only withdraw the TFC element as part of each withdrawal rather than drawing it out upfront to let the TFC element potentially increase.

SVaz

Just crystallise a year’s income, take the TFC and drawdown the rest monthly. I’m sure most platforms do that.
My Wife takes her available personal allowance monthy and takes the TFC on top and puts it in an ISA. Works exactly like ufpls. All done online once a year.

dunstonh

I get that UFPLS is newer so may be less supported though.

It's been around since 1995.It wasn't called UFPLS back then, but it was available.

adviceisgood

Hi,

We use UFPLS from an interactive investor SIPP and generally every month we take funds, the process is very simple,

A quick online application (5 mins to complete) a document is provided on the website after a couple of days showing the request and then we schedule a 10 minute phone call with interactive investor advisor ,following this we withdraw the funds which normally takes 7 days to hit the account.

In fact last month there was no requirement to speak to interactive investor so the process was even easier.

We have done this for 15 months without issue just need to be slightly organised.