The Lemon Fool

I too thought it would be very complicated. I have three separate DB pensions, income from my SIPP in drawdown with HL, and the state pension to come later this year. To my surprise, HMRC dealt with it perfectly, applying most of my tax feed allowance to the largest DB, the remainder of the allowance to the next DB, and taxed the remainder at the appropriate rate.

I expected to have to self-assessment but it ain’t been necessary at all.

How do you actually pay yourself from SIPPs and other pensions where there's a pot of shares/money? Do you tell the provider to pay me X amount per month? And how does this work if there's insufficient cash sitting in the account? Thanks.

MrFoolish wrote:How do you actually pay yourself from SIPPs and other pensions where there's a pot of shares/money? Do you tell the provider to pay me X amount per month? And how does this work if there's insufficient cash sitting in the account? Thanks.

It's up to you to make sure the cash is there, either from dividends or by selling shares.

You tell the provider how much to pay you, and they run it through the payroll.

Scott.

MrFoolish wrote:How do you actually pay yourself from SIPPs and other pensions where there's a pot of shares/money? Do you tell the provider to pay me X amount per month? And how does this work if there's insufficient cash sitting in the account? Thanks.

I made this enquiry only yesterday with my SIPP provider, iWeb. I plan to commence drawdown next year. It's simply a case of completing a form stating how much you require (in my case a small monthly amount to utilise my personal tax allowance) and then making sure the SIPP account has enough cash to fund the payment each month.

MrFoolish wrote:How do you actually pay yourself from SIPPs and other pensions where there's a pot of shares/money? Do you tell the provider to pay me X amount per month? And how does this work if there's insufficient cash sitting in the account? Thanks.

My SIPP has a default of selling enough of your largest holding to generate sufficient free cash each month if insufficient dividends have arrived to cover the monthly pension payment.

DrBunsenHoneydew wrote:

MrFoolish wrote:How do you actually pay yourself from SIPPs and other pensions where there's a pot of shares/money? Do you tell the provider to pay me X amount per month? And how does this work if there's insufficient cash sitting in the account? Thanks.

My SIPP has a default of selling enough of your largest holding to generate sufficient free cash each month if insufficient dividends have arrived to cover the monthly pension payment.

Interesting, who is that with? I presume they make a standard dealing charge for this? So if you were, say, £1 cash short, they would sell £1 worth of shares, and charge you a tenner or so for it?

Scott.

swill453 wrote:

DrBunsenHoneydew wrote:

MrFoolish wrote:How do you actually pay yourself from SIPPs and other pensions where there's a pot of shares/money? Do you tell the provider to pay me X amount per month? And how does this work if there's insufficient cash sitting in the account? Thanks.

My SIPP has a default of selling enough of your largest holding to generate sufficient free cash each month if insufficient dividends have arrived to cover the monthly pension payment.

Interesting, who is that with? I presume they make a standard dealing charge for this? So if you were, say, £1 cash short, they would sell £1 worth of shares, and charge you a tenner or so for it?

Scott.

It's a Cofunds account, which only holds "unit trusts" with no charge to sell.

Been doing it for 17 years
Decide how much money you need per year
Sell appropriate quantity of equity and/or bonds -keeping your Asset Allocation right a week or two before withdrawal so monies sitting in your cash account
Notify platform you want to withdraw the money
Calculate the amount of tax that has been charged -platforms usually charge at the 20% rate
If tax is too much reclaim using R55 form and reclaimed tax in your bank account within a month
That’s it
xxd09