Is this 'swap' possible?

[NegevSouth]

I have a SIPP in Vanguard's own platform and where all my funds of £60k are invested in their VLS60. Until now I've never withdrawn anything and so it remains uncrystallised and furthermore I don't envisage needing to withdraw for at least another 3 years. (I'm retired, late 60s by the way). Even then I'll only need to withdraw approximate annual amounts of around 3.5 - 4k.

I'm considering putting half the amount into Vanguard's FTSE Dev World excl UK and leaving the other half as it is in VLS60. If I instruct Vanguard to do this, would this be costly, at least initially? Wondering how the actual process works. Would they sell half of my VLS60 and the proceeds go into a cash account and with that amount would they then purchase the Index fund? How does it affect crystallisation and the 25% tax-free eligibility?

[JohnB]

Vanguard may have small transaction charges to do this, brokers do. But your pension status as far as future withdrawls goes will be unchanged

[monabri]

I can answer part of the question and agree with JohnB. The assets in your SIPP are currently VLS60 but you want to reduce VLS60 and add Vanguard's FTSE Dev World excl UK ...however it will all be transactions within your SIPP so there's no effect on your 25% tax free eligibility.

[Alaric]

Wondering how the actual process works. Would they sell half of my VLS60 and the proceeds go into a cash account and with that amount would they then purchase the Index fund?

I expect that would be how it would work. I expect they only price the funds once a day (normal for OEICs), so given an instruction they may execute both on the same pricing point, or expect to apply a day or two delay.

Are either of the funds ETFs? If so the deals could go through immediately as the cash is not required until the settlement date, usually a day or two later.

All you are doing is switching investments inside a SIPP which is a routine part of maintaining a SIPP.

[NegevSouth]

Thanks guys!
I'll probably phone Vanguard to confirm a transaction cost. Hate doing that. Unless their customer service is such that someone answers within 60 seconds and they give me a definitive answer straight away. But life doesn't work like that anymore ha!

Reason for my thread was that I was thinking if I sell part of the VLS60, it'd be crystallised and so the 25% tax-free element wouldn't increase if the fund increases over some years. But your above answers have assured me it's fine.

Also wanted to mention that though markets are down, selling some VLS60 in order to purchase the index fund would probably cancel each other out. In this particular case, sell low and buy low is better than sell low and buy high.

[ReformedCharacter]

Thanks guys!
I'll probably phone Vanguard to confirm a transaction cost. Hate doing that. Unless their customer service is such that someone answers within 60 seconds and they give me a definitive answer straight away. But life doesn't work like that anymore ha!

You might prefer to ask via a secure message:

Please send us a secure message using the Inbox feature within your account. This will help us respond with information specific to you.

https://www.vanguardinvestor.co.uk/need-help

I've used the service and it was OK, reasonably prompt and helpful.

RC

[stevensfo]

Thanks guys!
I'll probably phone Vanguard to confirm a transaction cost. Hate doing that. Unless their customer service is such that someone answers within 60 seconds and they give me a definitive answer straight away. But life doesn't work like that anymore ha!

You might prefer to ask via a secure message:

Please send us a secure message using the Inbox feature within your account. This will help us respond with information specific to you.

https://www.vanguardinvestor.co.uk/need-help

I've used the service and it was OK, reasonably prompt and helpful.

RC

Apart from very simple and mundane matters, I avoid phoning like the plague and always go via emails, secure messaging or letters.

With secure messaging, I'm so paranoid that I take a copy of the page.

I've heard so many stories of people having to spend 10-20 minutes to get through on the phone that it's simply not worth it.

Besides, in these days of Privacy, Safety, Security, AML, KYB etc, what proof would you have that something has been agreed via a phone call?


Steve

[mc2fool]

Besides, in these days of Privacy, Safety, Security, AML, KYB etc, what proof would you have that something has been agreed via a phone call?

Recordings. Just about every financial institution and many others record calls (for quality assurance and training purposes they say). Whether they can find the recording and find the part where their agent promised you a golden egg laying goose is another matter of course.

However, lots of phones have a record function nowadays, although I must admit even though I intend to, after 15 minutes of your call is important to us, I pretty much always forget to press the record button.....

[Lootman]

Besides, in these days of Privacy, Safety, Security, AML, KYB etc, what proof would you have that something has been agreed via a phone call?

Recordings. Just about every financial institution and many others record calls (for quality assurance and training purposes they say). Whether they can find the recording and find the part where their agent promised you a golden egg laying goose is another matter of course.

However, lots of phones have a record function nowadays, although I must admit even though I intend to, after 15 minutes of your call is important to us, I pretty much always forget to press the record button.....

That message to you telling you that the call is being recorded was, I thought, a legal requirement. If you are recorded without your knowledge then it is my understanding that that recording could not later be used in evidence if it came to that.

So if you are recording a phone conversation yourself, are you not also required to inform that other party that you are doing so? Or else risk that your recording will be inadmissible in court?

[stevensfo]

Besides, in these days of Privacy, Safety, Security, AML, KYB etc, what proof would you have that something has been agreed via a phone call?

Recordings. Just about every financial institution and many others record calls (for quality assurance and training purposes they say). Whether they can find the recording and find the part where their agent promised you a golden egg laying goose is another matter of course.

However, lots of phones have a record function nowadays, although I must admit even though I intend to, after 15 minutes of your call is important to us, I pretty much always forget to press the record button.....

That message to you telling you that the call is being recorded was, I thought, a legal requirement. If you are recorded without your knowledge then it is my understanding that that recording could not later be used in evidence if it came to that.

So if you are recording a phone conversation yourself, are you not also required to inform that other party that you are doing so? Or else risk that your recording will be inadmissible in court?

Crikey, I remember discussions like these over 30 years ago! 'This message may be recorded for training purposes' etc.

I have no idea how it would hold up in court since there is no check to see if you agree, no button to press to show that you agree, no check of identity or indeed, proof that you have even 'heard' the message.

Not that I would ever agree to something very important via a phone call, but at the very least, I'd probably ask the person to state their full name, DOB, the date and time and purpose of the call.

Blood group, inside leg and colour of underpants would be optional extras.

Steve

[NegevSouth]

Further to my initial thread, I spoke to Vanguard's customer service. The agent confirmed there will be no charges. However, he was a little vague as to my question relating to length of time it takes to complete a swap.

He said it could take up to 8 working days for the swap to be confirmed. I can't understand why it doesn't take 2 days maximum.

The cut-off times for VLS60 and Vangd FTSE Dev World excl UK are 9am and 11am respectively. So if I give an online instruction late at night, the price to sell VLS60 would be 9am the next morning, no? At that point presuming I've missed the 11am cut-off point to purchase the index fund, it would be purchased at 11am the following day?? So really 2 working days?