This short guide details how to generate a series of variable, or 'stepped', payments (whether of tax-free cash only, or a combination of tax-free cash and taxable income), from an as-yet-un-crystallised money purchase fund. To do so, one will need to enter multiple, discrete crystallisation instructions, using a series of 'events' added to the Timeline in advance.
For the purpose of illustration, let's assume an individual wishes to receive £40,000 tax-free cash, at age 57, then to receive a further tax-free payment of £60,000 at age 62. To this end, 2 events have been situated on the timeline.
NB: As an aside, note that the initial (£40,000) payment could be either a 'One Time', or a 'Recurring' payment - I have merely assumed a one-off payment, for this illustration.
1. Go to the Pensions > Money Purchase screen, then to Withdrawals & Annuity > Crystallisation of Money Purchase (as illustrated below).
2. As shown, select the first crystallisation event, and specify the appropriate amount to be crystallised, at this first event:
The key to adding a further crystallisation instruction (as illustrated, below), is that one needs to amend the % of Account Value figure to any value less than '100%' - ignore the fact that this radio button is not, in fact, the selected option.
In this instance, I have set % of Account Value to 0% - this activated the Add Crystallisation button, thereby enabling me to select a second crystallisation event, in the next dropdown (as illustrated above).
In the example above, the individual is wishing to receive tax-free cash only, with the balance going into 'Flexi-Access Drawdown' (FAD). As detailed elsewhere, however, the Lump Sum setting can be amended to '100%' if - by contrast - one intends to model a series of 'Uncrystallised Funds Pension Lump Sum' (UFPLS) withdrawals.
NB: The software works through the given crystallisation instructions sequentially, meaning that the first instruction will be carried-out only until a subsequent, later instruction is encountered.
Also note, while there are many possible permutations, one constraint is that it is not currently possible to mix-and-match percentage-based crystallisation instructions with monetary-based crystallisation instructions.
Last updated 26 October 2015, Release 4.0.24
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