Partial Flexi Access Drawdown and UFPLS

[airbus330]

Hopefully someone with a better understanding of pension rules can clarify this for me.

Last 4 years I have been taking £16666 from my DC Uncrystallised pension to supplement income from my ISA investments and use up my Personal Allowance.

A small change of circumstances this year means that I have a requirement for a modest cash drawdown for a one off expense.

If I take another UFPLS it will expose me to a tax charge.

I have asked my pension provider, Aviva, to do a Partial Flexible Access drawdown from my account. The amount requested is £60k.

After this, 25% of the 60k will be paid to my bank free of tax.The remaining 75% will be transferred to a Drawdown Account and remain invested until I require taxable income in the future.

I asked Aviva if, after taking this money, am I still allowed to make further UFPLS drawdowns from the remaining funds in the uncrystallised fund. They have said no because the rules prevent UFPLS after utilisation of a Flexi Access request.

I can't find a definitive answer to why this is. I will end up with 2 pots of money. One in drawdown with the tax free element used, so obviously ineligible for UFPLS. The other old pot remaining uncrystallised, fully invested and with its tax free element untouched.
So, why can't I take a further UFPLS from this pot?
If I can't take any more UFPLS drawdowns, I can continue to make periodic partial Flexi Access drawdowns, am I disadvantaged by doing this? I don't think there is much in it, but feel my grip on the detail might be lacking.

Thanks in advance.

[TedSwippet]

If I can't take any more UFPLS drawdowns, I can continue to make periodic partial Flexi Access drawdowns, am I disadvantaged by doing this?

No. As you've worked out, UFPLS is nothing more than a pre-packaged and inflexible implementation of flexi access. It combines a) crystallising a chunk of pension and taking 25% of that tax free, and b) taking a taxable drawdown of the remaining 75%, into a single action on your part. However, you could easily mimic exactly this in flexi access.

As a general rule, flexi access is better than UFPLS in practically every case. You can make it act exactly like UFPLS if you want, but you also have far greater flexibility to better manage your own income and tax situation. Your one-off need for a bit of extra tax-free cash without taking taxable drawdown is a perfect example.

The government invented UFPLS largely for the administrative convenience of the pension providers. Aside from another unpronounceable acronym, there is nothing worthwhile in it for individual pension holders.

[ursaminortaur]

If I can't take any more UFPLS drawdowns, I can continue to make periodic partial Flexi Access drawdowns, am I disadvantaged by doing this?

No. As you've worked out, UFPLS is nothing more than a pre-packaged and inflexible implementation of flexi access. It combines a) crystallising a chunk of pension and taking 25% of that tax free, and b) taking a taxable drawdown of the remaining 75%, into a single action on your part. However, you could easily mimic exactly this in flexi access.

As a general rule, flexi access is better than UFPLS in practically every case. You can make it act exactly like UFPLS if you want, but you also have far greater flexibility to better manage your own income and tax situation. Your one-off need for a bit of extra tax-free cash without taking taxable drawdown is a perfect example.

The government invented UFPLS largely for the administrative convenience of the pension providers. Aside from another unpronounceable acronym, there is nothing worthwhile in it for individual pension holders.

However the inability to take UFPLS from any remaining uncrystallised part of your pension pot after you have crystallised part is either an internal rule of Aviva or a misunderstanding by them. I'm pretty sure that other providers such as A J BELL allow you to have both crystallised and uncrystallised parts of your pot and to specify whether you want to then take a UFPLS payment from the uncrystallised part or a taxable drawdown from the already crystallised part as you wish. What you obviously can't do though is take a UFPLS payment from the crystallised part of your pot.

[airbus330]

No. As you've worked out, UFPLS is nothing more than a pre-packaged and inflexible implementation of flexi access. It combines a) crystallising a chunk of pension and taking 25% of that tax free, and b) taking a taxable drawdown of the remaining 75%, into a single action on your part. However, you could easily mimic exactly this in flexi access.

As a general rule, flexi access is better than UFPLS in practically every case. You can make it act exactly like UFPLS if you want, but you also have far greater flexibility to better manage your own income and tax situation. Your one-off need for a bit of extra tax-free cash without taking taxable drawdown is a perfect example.

The government invented UFPLS largely for the administrative convenience of the pension providers. Aside from another unpronounceable acronym, there is nothing worthwhile in it for individual pension holders.

However the inability to take UFPLS from any remaining uncrystallised part of your pension pot after you have crystallised part is either an internal rule of Aviva or a misunderstanding by them. I'm pretty sure that other providers such as A J BELL allow you to have both crystallised and uncrystallised parts of your pot and to specify whether you want to then take a UFPLS payment from the uncrystallised part or a taxable drawdown from the already crystallised part as you wish. What you obviously can't do though is take a UFPLS payment from the crystallised part of your pot.

Thanks to both of you for the helpful replies.
These have reassured me that I have not missed anything adverse.
I am content to use FAD in future and for sure, Aviva prefers it. The lack of technical knowledge displayed by their staff on the phone is disappointing. So far, they have compensated me twice for making mistakes and I'm seriously considering moving to another provider.
AFA the UFPLS from the remaining Uncrystallised pot is concerned, it is puzzling. This is their written response:

"They have confirmed that if you take money via Flexi Access Drawdown and still have uncrystallised money in your accumulation fund, then you would not be able to request money via UFPLS.

This is due to UFPLS and FAD being two different options in themselves, therefore once you commit to going into drawdown every subsequent withdrawal will be processed as such."

I find the lack of a reference to scheme rules a bit annoying, so shall ask for clarification.