Drawdown charges

[StepOne]

Hi,

I have my SIPP with AJ Bell, through iWebSharedealing. Charges are £90 a quarter for a SIPP with £300k in it. Having turned 55 I'm now contemplating going into drawdown (crystallising?), so I can get my tax free lump sum, although I'm not planning on actually retiring, or drawing any further income from the SIPP for a few years yet.

Apparently when I go into drawdown there will be an additional 180 annual charge, for a total of 360 for the year, which seems reasonable, but is obviously a flat rate, so won't drop as the pot reduces over time. I just wondered whether there were any other options I should be looking at?

Also - if I take only my tax free lump sum, does the MPAA apply?

Thanks,
StepOne

[kempiejon]

I have HL
https://www.hl.co.uk/retirement/drawdow ... rest-rates

It's free to set up drawdown with us through the HL SIPP. And you can start, stop or change your drawdown income withdrawals whenever you want, without charge.

Please note that the charges below will apply to the HL SIPP and drawdown account separately if you hold both accounts.

Shares
Including UK and overseas shares, investment trusts, exchange-traded funds, VCTs, gilts and bonds. 0.45% capped at £200 per year

Funds are uncapped starting at 0.45 and reduce on a sliding scale until you get to £2M. Where the excess if free.

Edit for

Also - if I take only my tax free lump sum, does the MPAA apply?

I understand MPAA doesn't, at least that's the plan I'm working to.

[ursaminortaur]

Hi,

I have my SIPP with AJ Bell, through iWebSharedealing. Charges are £90 a quarter for a SIPP with £300k in it. Having turned 55 I'm now contemplating going into drawdown (crystallising?), so I can get my tax free lump sum, although I'm not planning on actually retiring, or drawing any further income from the SIPP for a few years yet.

Apparently when I go into drawdown there will be an additional 180 annual charge, for a total of 360 for the year, which seems reasonable, but is obviously a flat rate, so won't drop as the pot reduces over time. I just wondered whether there were any other options I should be looking at?

Also - if I take only my tax free lump sum, does the MPAA apply?

Thanks,
StepOne

A J Bell's own SIPP doesn't charge anything extra for drawdown (there used to be a charge but they removed it years ago)

https://www.ajbell.co.uk/sipp/charges-and-rates

Are there any charges for taking income from my SIPP (drawdown)?
When you reach age 55 (rising to 57 from 2028) you can access your SIPP. There are no charges for accessing your SIPP using drawdown or to take lump sums from your pension.

The MPAA only applies if you take potentially taxable income from a DC pension. So it would apply if you used UFPLS to access your SIPP since then 75% of what you drew down would be potentially taxable but if you used flexi-access and only took your tax free lump sum then the MPAA wil not be triggered.

[StepOne]

I have HL
https://www.hl.co.uk/retirement/drawdow ... rest-rates

It's free to set up drawdown with us through the HL SIPP. And you can start, stop or change your drawdown income withdrawals whenever you want, without charge.

Please note that the charges below will apply to the HL SIPP and drawdown account separately if you hold both accounts.

Shares
Including UK and overseas shares, investment trusts, exchange-traded funds, VCTs, gilts and bonds. 0.45% capped at £200 per year

Funds are uncapped starting at 0.45 and reduce on a sliding scale until you get to £2M. Where the excess if free.

Edit for

Also - if I take only my tax free lump sum, does the MPAA apply?

I understand MPAA doesn't, at least that's the plan I'm working to.

95%+ of my SIPP is in Vanguard ETFs, and the rest a few UK shareholdings, so it would be capped at 200, but it does say that if I have a SIPP and a drawdown I'll be charged twice. I'm assuming I can have a single account - move the whole lot into drawdown, then take 25% tax free, and leave the rest sitting there, in a drawdown (but not actually being drawn down!) with a single 200 charge. I will take a look on the HL site. I think AJ Bell might be similar.

Thanks,
StepOne

[StepOne]

A J Bell's own SIPP doesn't charge anything extra for drawdown (there used to be a charge but they removed it years ago)

https://www.ajbell.co.uk/sipp/charges-and-rates

That is great news! I did look at the AJ Bell website a while back and charges seemed excessive, but I think I must have been looking at a funds examples. Basically if I don't trade with the AJ Bell SIPP it will be 120 a year, which is a third of what iWeb want to charge me, even though underlying it is still with AJ Bell. I wonder if the transfer process is any easier given that it's AJ Bell to AJ Bell ... somehow I don't think it will be

The MPAA only applies if you take potentially taxable income from a DC pension. So it would apply if you used UFPLS to access your SIPP since then 75% of what you drew down would be potentially taxable but if you used flexi-access and only took your tax free lump sum then the MPAA wil not be triggered.

Perfect!

[ukmtk]

I have a SIPP with HL and only pay £200 per year.
They recently removed the charge for monthly savings.
I only have ETFs & ITs - have always avoided the funds - held some shares a few years ago.
As far as I'm aware they don't charge for drawdown either - which I hope to do in the near future.

[xxd09]

I run SIPPs (in FlexiDrawdown) and ISAs for my wife and I at Interactive Investor ie 2xSIPPs and 2xISAs
Running costs £263 pa each for my wife and I
Total platform running costs £536 pa for what in total value is a low seven figure portfolio
xxd09