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Approaching 55, drawdown advice
David Hetherington
Posted: 10 June 2018 10:02:55(UTC)
#22

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I have invested through AJ Bell in its SIPP and ISA accounts since 2005. They are cheap and they solve any issues perfectly acceptably and charge me £100 per year in the SIPP and charge £10 per sale or purchase. I currently hold 23 investment trusts in my SIPP and 3 in my ISA accounts. I shall soon have to withdraw my 1/4 lump sum since I shall shortly hit the Lifetime Allowance. In accessing your SIPP, you need to be aware that you could restrict your Annual Allowance to £4K per year in future, whereas simply accessing your lump sum may enable you to retain the Annual Allowance of £40k per year. You also need to see how to resolve the problem of ring-fenced nominee accounts as shown by the Beaufort Securities insolvency where PWC appear to be able to to “pool” all nominee accounts to pay their full administration charges. It may be necessary to have SIPP accounts with different firms with no more than £50k in each, which is the extent of Government protection. DH
3 users thanked David Hetherington for this post.
Mr Helpful on 10/06/2018(UTC), hornbeam on 10/06/2018(UTC), Mike L on 13/06/2018(UTC)
Monty Claret
Posted: 10 June 2018 10:37:04(UTC)
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David

I would be grateful if you could explain your thinking regarding your PCLS with regard to the LTA.

Surely your £250,000 withdrawal will use up approximately 25% of your LTA? That would leave you with 75% LTA left, and any investment value increase will still see you paying 55% tax ( or 25% on income).

I am also effected by the LTA, I am considering going into drawdown when the market corrects,which it will of course do a some point. The subsequent hopeful market increase would then take ones drawdown pot back above the LTA with no tax liability.

Look forward to hearing other more learned people’s replies.

MC
R Ellis
Posted: 10 June 2018 10:38:57(UTC)
#24

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I have been with Hargreaves Lansdown for over ten years. I have a SIPP and an ISA for both myself and my wife along with three ISAs I run for my kids.

I only invest in funds - with a portfolio of 25 that I review fully on an annual basis - and tinker with once a quarter. HL have a switch facility that costs nothing to go out of one fund and into another - and it leaves you out of the market only for a day. I find this very helpful.

Yes they are more expensive than the rest but you cannot question the quality of their service.

I have recently transferred in a pension for my wife and myself to AJ Bell. All good so far and a cheaper platform fee than HL - but with a charge for switches.

Complete your research and make your decision. Give your chosen provider 12 months and if you aren't happy with them then switch.


David Hetherington
Posted: 10 June 2018 11:52:39(UTC)
#25

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Monty
I am 65 and so I can withdraw as I wish, subject to tax restrictions. When my SIPP reaches £1m, I intend to take a £250k lump sum, which will use up about 97percent of my LTA, being 25percent of the current LTA which is £1.03m. I then propose to invest it in the same ITs, but outside the SIPP, and realise any annual capital gains up to the current CGT relief of just under £12k plus dividends up to the tax free £2k per year. If I left the £250k in my SIPP, I understand that I would still have to pay up to a 57percent tax penalty on the investment growth of that £250k left in the SIPP, whereas any further growth outside my SIPP would be tax free using my annual tax reliefs. DH
1 user thanked David Hetherington for this post.
john brace on 10/06/2018(UTC)
David Hetherington
Posted: 10 June 2018 12:08:10(UTC)
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Monty
I forgot to add that this would crystallise the remaining £750k in my Sipp and send it into drawdown. I would have to draw off any further investment growth as income, otherwise on reaching 75, I would be taxed at up to 45 per cent income tax on the excess over £750k, as I understand the tax rules. DH
hornbeam
Posted: 10 June 2018 13:52:29(UTC)
#27

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So when your transfer to drawdown, can you split it to more than one provider. I.e 50% in HL and 50% AJ Bell to spread the risk.

Also who has your money is it HL or are they just administering between you and the fund, so if HL went bust you can still get to the fund.
David Hetherington
Posted: 10 June 2018 14:40:24(UTC)
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Hornbeam
Thank you for your reply. My Sipp amounts to £960k at present and is solely with AJBell. I believe that it is probably possible to transfer the excess over £50k, and split it equally between 19 other Sipp providers, to qualify for the £50k Government protection per provider, albeit that it complicates matters.
My understanding of the Beaufort Securities insolvency is that under the Special Administration Regime, the nominee accounts are not protected against the administrators’ general charges if there is a shortfall. I understand that all client accounts in excess of £50k go into a pool. In the Beaufort case PWC have apparently refused other brokers’ offers to accept transfers, and PWC proposes to take client monies above £50k per account and use it to pay their general administration charges, and has reported that since there is a shortfall, all clients holding in excess of £50k will pay the administration charges in general, and not simply the cost of transferring each so-called “ring-faced” client account to a different SIpp provider. Each client above £50k will apparently subsidise the administration to the tune of more than 40 per cent, albeit PWC have now apparently agreed to reduce their charges due to clients’ protests. Having said that, I have been happy with AJBell and would prefer to keep my sipp intact, provided that it was protected from any future general administration DH
1 user thanked David Hetherington for this post.
hornbeam on 10/06/2018(UTC)
Monty Claret
Posted: 11 June 2018 12:59:28(UTC)
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David


Thank you for your detailed reply. Yes, I see how that helps you, I agree about making sure at 75 one has the same or less value in the SIPP than now. You have given me something more to think about.

I am in the rather fortunate position of being significantly over my IP14, so was looking at it from a slightly different position. You have certainly made me look at this now in two parts.

Regards
MC
martin verlaine
Posted: 11 June 2018 13:46:16(UTC)
#30

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I have a SIPP with both AJ Bell and HL. I find the former to be easily the best and whilst the latter do answer queries in a reasonable time, I am not too impressed with their response to something that is not straightforward ( I used to run a SIPP so they cannot draw the wool over my eyes) , I do find their website less user friendly. I am in the process of transferring a pension of £600K and this is going to AJB rather than HL. I rather hate the latter's determination to bombard you with paperwork, most of which ends up in the recycling. Yes their charges for SIPP peripherals are slightly lower but service counts to me rather than moving for a saving of a very few quid.

I work for a regulated firm and frankly anyone in the industry was aware BS was a mess and it was shoddy journalism from the Times to tar compliant firms with the same brush. The FCA should shoulder a lot of blame as they failed to regulate this firm sufficiently and it is only when the chips are down that you can appreciate they were allowed to continue to trade in a fashion which was ultra high risk and liable to cause losses if it all had to be wound up


I would not move my SIPP to smaller firms as the regulator's determination to make Providers responsible for what DIY investors buy will shake out a lot if it goes ahead ( first mooted some 15 years ago which suggests it has legs and will come to pass.
3 users thanked martin verlaine for this post.
hornbeam on 11/06/2018(UTC), Monty Claret on 12/06/2018(UTC), Sara G on 12/06/2018(UTC)
hornbeam
Posted: 11 June 2018 13:55:29(UTC)
#31

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Thanks Martin, do AJ bell have the same amount of funds as HL
Mr J
Posted: 12 June 2018 19:03:23(UTC)
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I have yet to read through the Beaufort Securities thread but it seems awful and legalised robbery.

My thought is that there must perhaps be some protection in scale. HL have £88 billion under management and over 1 million customers. If they were ever to go bust it would have to be one hell of a thing to end up with billions of pounds of losses and administration costs. Also every MP in the land would have constituents queueing up to complain and likely marching on parliament. I don’t know how the sums work out for Beaufort Securities but presumably they must have vastly smaller number of clients and funds under management.

1 user thanked Mr J for this post.
Tim D on 13/06/2018(UTC)
Samual Saunders
Posted: 13 June 2018 05:43:50(UTC)
#33

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If I wanted to save a few hundred in charges with a Sipp of over £300k and a Drawdown Account over £60k with HL, would it be possible to move the Sipp to another platform and just use the drawdown with HL, feeding it from the other platform as required?

paul armstrong
Posted: 22 June 2018 07:38:46(UTC)
#34

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Not sure I understand you. I have read, only read mind, that transferring once in drawdown imposes additional complications. If it were me, I would transfer before any crystallisation events. In terms of charges, HL is very competitive if you restricted your self to non-funds. That proves to be a bit restrictive as many attractive investments, eg Vanguard LS, are structured as funds, and Investment Trusts aren't the given they once were owing to low discounts/ premiums and fees. Still, if you held your bond investments as direct holdings in UK gilts and sought out ETFs for the other investments HL would be competitive.
1 user thanked paul armstrong for this post.
Tim D on 22/06/2018(UTC)
Samual Saunders
Posted: 22 June 2018 08:02:11(UTC)
#36

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Thanks but have already crystalised, using £100k to Drawdown and taking the £25k TFC. Only drawn a few add-hoc sums since then so the whole fund is still growing.

I have also switched funds to Lindsell Train Global equity and their UK equity, both up by 9.59 and 6.68 since 20 April, also have J O Hambro UK Equity, not quite as good as the LT ones at 4.23%. Unfortunately also switched to Artemis High Income and Strategic Bond and both down 2.94 and 1.59 since same time so have lost over £2k with those two. Overall up £12,782 since the switch so can't complain.

Will be switching to two 'Dogs' in a month ior so once dividends paid out.
Sam
philip gosling
Posted: 22 June 2018 08:20:51(UTC)
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Tom Bards;63567 wrote:
Most of them have bad reviews?


I highly doubt the integrity of such reviews, most of them are written by people who have made bad investment decisions and need someone to blame. All those platforms are high quality, I am with HL and their service in my opinion is second to none.




Well how would you know that people mostly people write rubbish? I mean reading your opinion you could be working in finance industry. Need to read a wide range of views and check how many reviews people have written about to see if their opinion is worth something. Most people who write in are complaining because something has gone wrong and the company has not put it right. If you've been reading this forum you'll have seen poor reviews on Barclays, TSB , Interactive investor recent performances and yet you claim most reviews are made up?
AnthonyL
Posted: 22 June 2018 08:59:12(UTC)
#37

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Samual Saunders;64200 wrote:


Will be switching to two 'Dogs' in a month ior so once dividends paid out.
Sam


Is it necessary to wait for the dividends to be paid out? I thought (and I may well be mistaken) pro-rata dividends were paid on funds. Can someone clarify?
Tim D
Posted: 22 June 2018 09:24:01(UTC)
#35

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paul armstrong;64196 wrote:
Not sure I understand you. I have read, only read mind, that transferring once in drawdown imposes additional complications.


I'd got that impression too somewhere. However, a quick glance at ATS' SIPP blurb includes "What types of pensions can I transfer to my SIPP? We currently accept cash transfers from most types of pensions, including: Personal Pensions and SIPPs (from other providers) including those you are already taking an income from through flexi-access drawdown.".

It's interesting they mention cash transfers though, and there's obviously something more complicated about SIPP in-specie transfers as they charge a whopping £500 per investment for in-specie transfers out, more than ten times what doing the same thing for an ISA costs. I was intrigued to see they will transfer a holding out (from a SIPP) to share certificates for a mere £20... which makes me wonder what'd happen if you then tried to transfer those into a SIPP on another platform or if you could even find anyone who'd accept them.
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