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[55andFedup]

Being self employed , I was talked into opening a small pension ( £50 per month) in 1990, I never really bothered about it until now, i'm 55 and wanted to draw as much off as possible
but can only take 25% leaving under 15K in either sipps or a drawdown.
which is better and does anybody know What meager return would i get on this amount if i reach 60/65 ?

[dunstonh]

Being self employed , I was talked into opening a small pension

And quite right too. Self employed dont get the full state pensions and should do as much as they can for retirement planning as the state wont help as much as an employed person.

£50 per month

Thats a shame. £50 is barely worth the effort now. Not bad for 1990 but rubbish for 2009.

i'm 55 and wanted to draw as much off as possible
but can only take 25% leaving under 15K in either sipps or a drawdown.

Is that wise? Wouldnt it be better to wait until you retire and make the most of it rather than take it now (assumption warning but little to go on here).

which is better

Depends on how you want to invest and what distribution channels you would use to do the transaction.

does anybody know What meager return would i get on this amount if i reach 60/65 ?

Depends on where you invest. tens of thousands of options potentially available.

[EdInvestor]

Originally Posted by 55andFedup

...but can only take 25% leaving under 15K in either sipps or a drawdown.....which is better

Drawdown is a way of getting an income from a pension fund, an alternative to an annuity ( a guaranteed income for life where you give up your capital).

A SIPP is a type of pension wrapper within which you can have the fund in drawdown.

Typically people who want to do drawdown move their pension from a conventional fund (personal pension or stakeholder) at a life insurer to a SIPP provider, which then pays out the 25% and puts the remainder in drawdown.

A couple of SIPP providers which will do small funds:

www.h-l.co.uk
www.sippdeal.co.uk

does anybody know What meager return would i get on this amount if i reach 60/65 ?

You would hope the remaining 75% would grow so it was larger than it is now.In drawdown you can take an income which is 120% of the annuity rate for your age.Annuity rates get higher as you get older.About 6-7% is typical for a man of 65 at the moment.

[dunstonh]

Typically people who want to do drawdown move their pension from a conventional fund (personal pension or stakeholder) at a life insurer to a SIPP provider, which then pays out the 25% and puts the remainder in drawdown.

I disagree with that. Typically, people who want to do drawdown use a personal pension. The market share shows that personal pensions are used more than SIPP. Its a minor correction as both offer pros and cons.

[EdInvestor]

Originally Posted by dunstonh

I disagree with that. Typically, people who want to do drawdown use a personal pension. The market share shows that personal pensions are used more than SIPP.

No doubt this was the case in the past when SIPPs were not regulated and Equitable Life was a leading drawdown supplier.I doubt it is so now, especially since Standard Life introduced its SIPP.Insurers still tend to require a minimum fund of £50-£100k for drawdown, so smaller funds will always tend to be found elsewhere.

[dunstonh]

I doubt it is so now

I am referring to figures that were published about two months ago. The insurers still have the majority. Remember that IFAs still transact the majority of pension transactions. So, whilst many of the DIY providers, like HL, use a SIPP, in the scheme of things they are not big enough to swing the figures.

Insurance company drawdown plans can be a lot cheaper than SIPPs. The FSA are hitting firms that over sell SIPPs and not using cheaper plans so its probable that the trend to SIPP that had been occurring will falter. At least until the FSA catches up to the 21st century.

Insurers still tend to require a minimum fund of £50-£100k for drawdown, so smaller funds will always tend to be found elsewhere.

Not so much nowadays. The drawdown only plans do but the personal pensions with drawdown available don't.