The Lemon Fool

Hi all, I haven’t posted for awhile, so nice to be back.

My SIPP is held on the AJ Bell Youinvest (formerly SIPPdeal) platform, and I’m planning to FIRE myself in a few months, so may want to start drawdown. Whilst I’ve been happy with them for the past 8 years, I’ve had a bad customer service experience on an unrelated matter (my mother’s account) so have more cause to re-evaluate whether to stay with them into drawdown.

So what’s the collective wisdom on the best (most flexible, lowest fees) platform when entering the drawdown phase of a SIPP?

Nathan

I'm with AJBell Youinvest. I take a single UFPLS payment per year, costs £30. Works pretty smoothly for me.

Scott.

Hi nathan,

My SIPP is with Interactive Investor ('ii'). They charge £19.99 per month for my SIPP in drawdown with one free trade a month (there are other plans which offer more trades if that is what you want). They currently have an offer that means the cost is £9.99 until June 2021 for new SIPPs.

I 'inherited' ii when I was moved from Alliance trust last year when they ceased to offer a platform and have had no problems with ii so far. The only (slight) irritation I have had is I had to present a fixed protection certificate because ii could not accept a copy previously lodged with Alliance.

I very much like the ii platform.

Bests,

Eb.

Monevator.com has a good site for platform comparisons
As with Eboli -had to change from Alliance to Interactive Investor -Takeover
Good experience so far-very responsive -via secure messaging and a human via a phone if needed
I am in drawdown and just take one lump sum most years to top up my cash account
I am not a trader-3 Index Tracker Funds and that’s it
xxd09

I use Hargreaves Lansdown and they have been good. Annual fees capped at £200, with no charges for drawdown. You can set up a fixed amount to drawdown, or vary it month to month. Request the payment online by the 17th of the month and it is paid on the 28th. If you do not have sufficient cash in the account, a lower amount is paid out (cash balance minus £50).

Well worth looking at other features and costs in addition to annual account and drawdown costs though. 1% Foreign exchange fees from converting dividends are something I find annoying and hidden in the small print instead of being laid out as a separate charge every time it happens.

ReallyVeryFoolish wrote:HL have a terrific platform, possibly the best out there. However, if you hold funds rather than only shares, investment trusts or ETFs as many folks do, then the £200 cap on SIPP fee doesn't apply. The regular 0.45 per cent platform fee applies up to £250k. That makes it expensive for many people. Horses and courses, naturally.

RVF

The other thing with HL, is that when you go into partial drawdown, the "SIPP" and the "SIPP Income Drawdown" are charged as two separate accounts - within one 'holding' account. So, under that scenario, you'd pay a minimum of £400 / year. I believe that (many) other providers keep the division between the two amounts (undrawn and drawdown) almost invisible to the user.

busyodfool wrote: I believe that (many) other providers keep the division between the two amounts (undrawn and drawdown) almost invisible to the user.

I’ve heard this but can’t imagine what it is like to operate. Would it not be more helpful for a user to be able to see (and perhaps choose different investments) the crystallised and uncrystallised funds separately?

busyodfool wrote:

ReallyVeryFoolish wrote:HL have a terrific platform, possibly the best out there. However, if you hold funds rather than only shares, investment trusts or ETFs as many folks do, then the £200 cap on SIPP fee doesn't apply. The regular 0.45 per cent platform fee applies up to £250k. That makes it expensive for many people. Horses and courses, naturally.

RVF

The other thing with HL, is that when you go into partial drawdown, the "SIPP" and the "SIPP Income Drawdown" are charged as two separate accounts - within one 'holding' account. So, under that scenario, you'd pay a minimum of £400 / year. I believe that (many) other providers keep the division between the two amounts (undrawn and drawdown) almost invisible to the user.

Having 2 accounts can be avoided by taking UFPLS payments instead of partial crystallisation, but that may not be ideal for some.

Chrysalis wrote:

busyodfool wrote: I believe that (many) other providers keep the division between the two amounts (undrawn and drawdown) almost invisible to the user.

I’ve heard this but can’t imagine what it is like to operate. Would it not be more helpful for a user to be able to see (and perhaps choose different investments) the crystallised and uncrystallised funds separately?

I'm with AJBell Youinvest and they hide the distinction between crystallised and uncrystallised behind the scenes. To me it just seems normal. Most of the time you can just treat it as a broker account where you can make withdrawals, deposits and investments as you like, without worrying about any dividing lines between different parts of the account.

It would be slightly better if there was some easy way of seeing how much is in each part at any moment in time though, but I can't see it online. I think you have to ask them for the figures.

There might be a danger if you tried to drawdown from the crystallised portion that you didn't have enough left in it.

Scott.

However, if you hold funds rather than only shares, investment trusts or ETFs as many folks do, then the £200 cap on SIPP fee doesn't apply. The regular 0.45 per cent platform fee applies up to £250k. That makes it expensive for many people.

This is exactly why I transferred my holdings from HL to AJB after I largely got out of shares into funds earlier in the year. I do agree that the HL site and support are marginally better than AJB but at a cost. That cost for me worked out at some £400 pa.

I also have a pot at ii - a recent transfer from yet another platform. My initial experience here is that whilst even cheaper than ii - the site and service is of a lower standard - though adequate.

T7

swill453 wrote:

Chrysalis wrote: I’ve heard this but can’t imagine what it is like to operate. Would it not be more helpful for a user to be able to see (and perhaps choose different investments) the crystallised and uncrystallised funds separately?

I'm with AJBell Youinvest and they hide the distinction between crystallised and uncrystallised behind the scenes. To me it just seems normal. Most of the time you can just treat it as a broker account where you can make withdrawals, deposits and investments as you like, without worrying about any dividing lines between different parts of the account.

It would be slightly better if there was some easy way of seeing how much is in each part at any moment in time though, but I can't see it online. I think you have to ask them for the figures.

There might be a danger if you tried to drawdown from the crystallised portion that you didn't have enough left in it.

Scott.

I can sort of see how it might work. The administrator has to keep track of the proportion of the fund that is crystallised but not yet drawn (C). When crystallising an amount X, C increases by X. X must always be less than or equal to 100%-C. When drawing down an amount D, C drops to (C-D)/(1-D). D must always be less than or equal to C.

For example, initially with a 100k C=0%. Crystallise 20k, X=20% of the fund and C=20%.

Drawdown 10k, D=10% and C=(20%-10%)/(100%-10%) = 1/9 ~= 11.1111%.

Drawdown 5k, D=5k/90k ~= 5.5555% and C=(11.1111%-5.5555%)/(100%-5.5555%) ~= 5.8824%.

Drawdown 5k, D=5k/85k ~= 5.8824% and C=(5.8824%-5.8824%)/(100%-5.8824%) = 0%

Something along those lines should keep within the flexi-access drawdown rules whilst keeping everything in one pot.


Note: if the whole fund is crystallised, C=100% and stays there. There is no need to keep track of it, which avoids the zero divided by zero issue when the final drawdown is made taking the fund to zero.

hiriskpaul wrote:I can sort of see how it might work. The administrator has to keep track of the proportion of the fund that is crystallised but not yet drawn (C). When crystallising an amount X, C increases by X. X must always be less than or equal to 100%-C. When drawing down an amount D, C drops to (C-D)/(1-D). D must always be less than or equal to C.

For example, initially with a 100k C=0%. Crystallise 20k, X=20% of the fund and C=20%.

Drawdown 10k, D=10% and C=(20%-10%)/(100%-10%) = 1/9 ~= 11.1111%.

Drawdown 5k, D=5k/90k ~= 5.5555% and C=(11.1111%-5.5555%)/(100%-5.5555%) ~= 5.8824%.

Drawdown 5k, D=5k/85k ~= 5.8824% and C=(5.8824%-5.8824%)/(100%-5.8824%) = 0%

Something along those lines should keep within the flexi-access drawdown rules whilst keeping everything in one pot.

Yes something like that. The important thing is that the percentage value has to be calculated on the day any deposits and withdrawals are made. It's not something that could be done retrospectively, as the value of the SIPP will be constantly changing.

You just have to hope that the administrators are keeping track of it.

Scott.

terminal7 wrote:

However, if you hold funds rather than only shares, investment trusts or ETFs as many folks do, then the £200 cap on SIPP fee doesn't apply. The regular 0.45 per cent platform fee applies up to £250k. That makes it expensive for many people.

This is exactly why I transferred my holdings from HL to AJB after I largely got out of shares into funds earlier in the year. I do agree that the HL site and support are marginally better than AJB but at a cost. That cost for me worked out at some £400 pa.

I also have a pot at ii - a recent transfer from yet another platform. My initial experience here is that whilst even cheaper than ii - the site and service is of a lower standard - though adequate.

T7

I am a little confused by your remark. Are you saying you find ii to be inferior to Youinvest?

swill453 wrote:

hiriskpaul wrote:I can sort of see how it might work. The administrator has to keep track of the proportion of the fund that is crystallised but not yet drawn (C). When crystallising an amount X, C increases by X. X must always be less than or equal to 100%-C. When drawing down an amount D, C drops to (C-D)/(1-D). D must always be less than or equal to C.

For example, initially with a 100k C=0%. Crystallise 20k, X=20% of the fund and C=20%.

Drawdown 10k, D=10% and C=(20%-10%)/(100%-10%) = 1/9 ~= 11.1111%.

Drawdown 5k, D=5k/90k ~= 5.5555% and C=(11.1111%-5.5555%)/(100%-5.5555%) ~= 5.8824%.

Drawdown 5k, D=5k/85k ~= 5.8824% and C=(5.8824%-5.8824%)/(100%-5.8824%) = 0%

Something along those lines should keep within the flexi-access drawdown rules whilst keeping everything in one pot.

Yes something like that. The important thing is that the percentage value has to be calculated on the day any deposits and withdrawals are made. It's not something that could be done retrospectively, as the value of the SIPP will be constantly changing.

You just have to hope that the administrators are keeping track of it.

Scott.

The percentage values of crystallised but undrawn C and uncrystallised 100%-C does not fluctuate with fund value, but the amount that C is adjusted at each crystallisation and drawdown event will depend on the size of the event (amount crystallised or drawn) and the fund value at the time of the event. If you wanted to, I would have thought you could keep track of C yourself. Does Youinvest not provide you with the fund value when you crystallise and make withdrawals?

I think the Youinvest way of handling drawdown is a better way to do things, even if HL did not charge for each account. With Youinvest it is unnecessary to choose what securities to transfer or split off into a separate drawdown account. But maybe some people would prefer that flexibility?

I am 100% crystallised with HL anyway, so it does not bother me that they do not keep everything in one account.

hiriskpaul wrote:The percentage values of crystallised but undrawn C and uncrystallised 100%-C does not fluctuate with fund value, but the amount that C is adjusted at each crystallisation and drawdown event will depend on the size of the event (amount crystallised or drawn) and the fund value at the time of the event. If you wanted to, I would have thought you could keep track of C yourself. Does Youinvest not provide you with the fund value when you crystallise and make withdrawals?

It's quite difficult for the SIPPholder to keep track of this.

Take my wife's SIPP for example. She crystallised all of it a few years ago and started taking drawdown. So at that point it's 100% crytallised, easy to keep track of.

She then annually pays in a £2880 contribution. So now the SIPP is partially uncrystallised. The proportion depends on the value of the SIPP at the time the contribution is made. She could keep note of that, but we have no idea if AJBell use the value at the beginning of the day, the end of the day, or maybe the exact time the transaction occurs. So any percentage value we take note of is only an approximation.

At some later point, the tax relief of £720 from HMRC arrives in the SIPP. In the meantime some drawdown has been taken, and also the value of the investments has changed. Again, the proportion now uncrystallised goes up, and depends on the current value of the SIPP. So unless we log on every day to see if the tax relief has arrived, we don't really know what the value was at the time the money was added.

So the information needed is a simple percentage, but keeping track of it isn't easy. One has to hope that the AJBell system is doing so. As I said, it would be nice if you could see this value online.

Scott.

I am a little confused by your remark. Are you saying you find ii to be inferior to Youinvest?

Sorry for any ambiguity - indeed based on a very short time with ii and based on 2 queries I find their service adequate though less thorough than AJB.

T7

swill453 wrote:

hiriskpaul wrote:The percentage values of crystallised but undrawn C and uncrystallised 100%-C does not fluctuate with fund value, but the amount that C is adjusted at each crystallisation and drawdown event will depend on the size of the event (amount crystallised or drawn) and the fund value at the time of the event. If you wanted to, I would have thought you could keep track of C yourself. Does Youinvest not provide you with the fund value when you crystallise and make withdrawals?

It's quite difficult for the SIPPholder to keep track of this.

Take my wife's SIPP for example. She crystallised all of it a few years ago and started taking drawdown. So at that point it's 100% crytallised, easy to keep track of.

She then annually pays in a £2880 contribution. So now the SIPP is partially uncrystallised. The proportion depends on the value of the SIPP at the time the contribution is made. She could keep note of that, but we have no idea if AJBell use the value at the beginning of the day, the end of the day, or maybe the exact time the transaction occurs. So any percentage value we take note of is only an approximation.

At some later point, the tax relief of £720 from HMRC arrives in the SIPP. In the meantime some drawdown has been taken, and also the value of the investments has changed. Again, the proportion now uncrystallised goes up, and depends on the current value of the SIPP. So unless we log on every day to see if the tax relief has arrived, we don't really know what the value was at the time the money was added.

So the information needed is a simple percentage, but keeping track of it isn't easy. One has to hope that the AJBell system is doing so. As I said, it would be nice if you could see this value online.

Scott.

If you go into "My Account"/"Access My Pension". Then under "If you'd like to create a new illustration, click continue", press the Continue button.

It will then chug away for a minute or more and will eventually come back with "Your pension information was obtained successfully. Please click above to continue.". Press the Continue button again.

Now click on "Tax free lump sum only". It then will show you your approximate Total Fund value (crystallised plus uncrystallised) and then a figure for Crystallised and a second figure for Uncrystallised. That should give you what you want.

You can then abandon this by clicking on one of the links at the top to navigate back to your account.

It's a bit long winded but I think it gives you the figures you wanted.

swill453 wrote:

hiriskpaul wrote:The percentage values of crystallised but undrawn C and uncrystallised 100%-C does not fluctuate with fund value, but the amount that C is adjusted at each crystallisation and drawdown event will depend on the size of the event (amount crystallised or drawn) and the fund value at the time of the event. If you wanted to, I would have thought you could keep track of C yourself. Does Youinvest not provide you with the fund value when you crystallise and make withdrawals?

It's quite difficult for the SIPPholder to keep track of this.

Take my wife's SIPP for example. She crystallised all of it a few years ago and started taking drawdown. So at that point it's 100% crytallised, easy to keep track of.

She then annually pays in a £2880 contribution. So now the SIPP is partially uncrystallised. The proportion depends on the value of the SIPP at the time the contribution is made. She could keep note of that, but we have no idea if AJBell use the value at the beginning of the day, the end of the day, or maybe the exact time the transaction occurs. So any percentage value we take note of is only an approximation.

At some later point, the tax relief of £720 from HMRC arrives in the SIPP. In the meantime some drawdown has been taken, and also the value of the investments has changed. Again, the proportion now uncrystallised goes up, and depends on the current value of the SIPP. So unless we log on every day to see if the tax relief has arrived, we don't really know what the value was at the time the money was added.

So the information needed is a simple percentage, but keeping track of it isn't easy. One has to hope that the AJBell system is doing so. As I said, it would be nice if you could see this value online.

Scott.

Hi Scott,

Why not setup a separate SIPP for new contributions? Vanguard with a 0.15% fee pa seems reasonable, so £5 per year for each year you contribute.

swill453 wrote:

hiriskpaul wrote:I can sort of see how it might work. The administrator has to keep track of the proportion of the fund that is crystallised but not yet drawn (C). When crystallising an amount X, C increases by X. X must always be less than or equal to 100%-C. When drawing down an amount D, C drops to (C-D)/(1-D). D must always be less than or equal to C.

For example, initially with a 100k C=0%. Crystallise 20k, X=20% of the fund and C=20%.

Drawdown 10k, D=10% and C=(20%-10%)/(100%-10%) = 1/9 ~= 11.1111%.

Drawdown 5k, D=5k/90k ~= 5.5555% and C=(11.1111%-5.5555%)/(100%-5.5555%) ~= 5.8824%.

Drawdown 5k, D=5k/85k ~= 5.8824% and C=(5.8824%-5.8824%)/(100%-5.8824%) = 0%

Something along those lines should keep within the flexi-access drawdown rules whilst keeping everything in one pot.

Yes something like that. The important thing is that the percentage value has to be calculated on the day any deposits and withdrawals are made. It's not something that could be done retrospectively, as the value of the SIPP will be constantly changing.

You just have to hope that the administrators are keeping track of it.

Scott.

I see what you mean. That is complicated. There may be additional rules that add to complexity as well. One that never occurred to me until I crystallised was accrued interest. If you hold bonds ìn your SIPP and crystallise a proportion of it, HL calculate the accrued interest on any bonds going into the drawdown account and include this in the crystallisation amount. This amount is used to test against the LTA and to work out the permitted PCLS. I guess Youinvest must take accrued interest into consideration as well somehow.

fisher wrote:If you go into "My Account"/"Access My Pension". Then under "If you'd like to create a new illustration, click continue", press the Continue button.

It will then chug away for a minute or more and will eventually come back with "Your pension information was obtained successfully. Please click above to continue.". Press the Continue button again.

Now click on "Tax free lump sum only". It then will show you your approximate Total Fund value (crystallised plus uncrystallised) and then a figure for Crystallised and a second figure for Uncrystallised. That should give you what you want.

You can then abandon this by clicking on one of the links at the top to navigate back to your account.

It's a bit long winded but I think it gives you the figures you wanted.

Wow fantastic! Just what I was looking for, thanks. Would have been nice of them to make it a bit easier (all I want is a single percentage value) but, hey...

Scott.