Transferring protected rights

tback

I have a Contracted Out Occupational Pension from a previous employer. I am seriously considering switching out for a number of reasons but struggling to find the right product.

I want max flexibility to invest myself.

I would prefer to transfer into a SIPP but can't find a provider who will accept protected rights?

If this is not possible then are there any different product providers which provide max flexiblity (in shares directly for example) and who will accept protected rights?

Thanks

dunstonh

SIPPS currently cannot accept protected rights. This may change after A day. You also have the launch of Hybrid/Insured SIPPs coming as well and these will take protected rights.

There are a couple of SIPP providers that have an add on insured element but the options are limited and not really desirable for most.

EdInvestor

Hi DH

Can you give us more info about hybrid / insured SIPPs?

A low cost SIPP provider called EPML will accept protected rights in a separate approved pension now, but you can only invest the money in cash.

dunstonh

Can you give us more info about hybrid / insured SIPPs?

They are on their way with a few providers. Although the final details are not known as they are waiting for the final rules to be given. However, a good example would be a fund supermarket offering their full unit trust/OEIC range within a personal pension wrapper. The hybrid SIPP would have no charges applied to it with the only charges being those on the unit trust/OEIC funds. It would not allow any external investments to be included with it. The trust(ee) arrangements would be like a personal pension with the provider taking care of that. That should also allow protected rights to be included as well as it will be an insured product.

So, for those that want to invest only in unit trust/OEIC funds, this would be a cheaper way of doing it than a full SIPP.

I personally think that these will become the mainstream product of the future as most full SIPP features are unlikely to be used by the average person. In addition, the use of unit trust funds reduces the charges that can often appear on mirror funds used by some pension providers.

A recent visit from one of the fund supermarket providers gave me some of these details and I have to admit that I am holding out for that option with my own pension.

Milarky

A related question - to dunstonh I suspect.

Do all stakeholder plans have to accept protected rights transfers or is this not a requirement, merely an option?

Thanks

EdInvestor

Thanks for the info DH.

Is it likely to be possible to do drawdown of PR funds from these hybrid SIPPs?

oceanblue_3

Milarky wrote:

A related question - to dunstonh I suspect.

Do all stakeholder plans have to accept protected rights transfers or is this not a requirement, merely an option?

Thanks

I don't know of any stakeholder pension providers who don't accept protected rights money; I suspect it is probably a condition of being granted stakeholder status.

oceanblue_3

EdInvestor wrote:

Thanks for the info DH.

Is it likely to be possible to do drawdown of PR funds from these hybrid SIPPs?

Bearing in mind that drawdown from a Protected Rights fund is already permitted, I can't see any problems.

EdInvestor

The problem is usually that many PR funds are fairly small and drawdown charges outside the low-cost SIPP environment too high to make it cost effective.

oceanblue_3

EdInvestor wrote:

The problem is usually that many PR funds are fairly small and drawdown charges outside the low-cost SIPP environment too high to make it cost effective.

You're probably right, but it's always worth seeking a professional opinion: each individual's circumstances and needs are different, and often people are prepared to pay a little more to get what they want.