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    • Confuciusone
    • By Confuciusone 8th Mar 17, 11:50 AM
    • 16Posts
    • 3Thanks
    Confuciusone
    Annuity or SIPP/Flexi Drawdown
    • #1
    • 8th Mar 17, 11:50 AM
    Annuity or SIPP/Flexi Drawdown 8th Mar 17 at 11:50 AM
    Looking for a little help and critique ….My wife aged 59 has a Prudential with Profits PP + SERPS annuity, written to age 60, now penalty free at the time of asking, she is retiring this month.

    Now intends taking her £93.5k pension fund and £23.3k 25% tax free, buy an annuity with the remaining £70k, having blood pressure and a few other minor health issues going down the enhanced option, assuming a possible 4 to 5% annuity rate….thought we made a decision.

    After talking to the IFA, happy to peruse an enhanced annuity after taking 25% and receive a pension approx 4.5%, £262 monthly, £3150 per annum, level, single life with 10 year guarantee taking over 22 years (then aged 81 years) to get her fund back.

    IFA also advised the option of taking 25% Lump Sum tax free 75% Flexi-Drawdown Fund, unfortunately IFA’s practice won’t handle Flexi-Drawdown Fund under £100k.

    After earlier dissming Flexi-Drawdown, this option is now looking an attractive and better suited as my wife has no taxable income form 2017/18 £11.5k tax allowance. She could take 25% lump sum and up to £11.5k tax free every year, depleting the fund before reaching State Pension age, avoiding tax implications, or ad hoc amounts as and when required, upto or below her tax allowance, any monies left in the fund transferable on death, unlike buying an income for life annuity.

    We have various savings and investments saved for our retirement income which have no tax implications, she feels living to age 80+ unlikely, (her parents died before reaching 70), also the possibility of losing half the fund after 10 year guarantee, we are happy to accept moderate ups and downs risks of the markets, her of pension and contributions of 30 years have been on the same roller coaster.

    So our thinking....DIY option, is to take out a SIPP that can be converted to a Flexi-Drawdown fund.

    Two questions really does our thinking stack up and any recommendations on trusted reputable SIPP / Flexi-Drawdown Fund providers.

    Many thanks.
Page 2
    • Confuciusone
    • By Confuciusone 20th Mar 17, 6:12 PM
    • 16 Posts
    • 3 Thanks
    Confuciusone
    So AJ Bell Youinvest work out a better option than H & L?

    Transfering her Fund to AJ Bell Youinvest, taking 25% LS, then Flexi Drawdown, taking £11.5k once a year would work out cheaper.

    AJ Bell Youinvest have a Purchase an annuity £150 for converting fund to drawdown?
    • hennerz
    • By hennerz 21st Mar 17, 12:27 AM
    • 171 Posts
    • 32 Thanks
    hennerz
    Yes, if you are OK going diy then it makes a lot of sense to transfer to a sipp.

    I use AJ Bell Youinvest for my flexi drawdown and would recommend them as would work out quite a bit cheaper than HL whether you are investing in funds or investment trusts etc.

    To compare providers have a look at the monevator comparison page
    http://monevator.com/compare-uk-cheapest-online-brokers/

    and also diy investor http://diyinvestoruk.blogspot.co.uk/2016/08/selecting-your-diy-pension-platform.html

    So far as funds etc. you could keep half in cash and invest the other half in Vanguard Lifestrategy 20 or 40 for a fairly simple option. The other route may be a basket of investment trusts.
    Originally posted by BLB53
    Agree with all this, the VG LS funds sound great for you too. Read as much on monevator about them as you can, should make your decision a little easier.
  • jamesd
    Purchasing an annuity doesn't mean starting drawdown. That's for buying an annuity from an insurance company.
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