Protected Rights in a SIPP and Sippdeal

rochester2008

Hi

I have preserved pension benefits and would be grateful to obtain any useful infromation I can obtain from the great people on this site before I make any decisions.

• I am a male aged 52
• I have preserved pension benefits in the NatWest pension scheme. Current transfer value is £112,000 (£48,000 Protected Rights and £64,000 non-Protected Rights)
• I have a personal pension with Friends Provident. Current TV is £20,000 (all non-protected rights)

I am thinking of transferring the whole lot of £132,000 into a SIPP. I then intend to go into income drawdown, take 25% (£33,000) as a tax-free lump sum and elect to take £0 income on the remiander of the fund for several years at least. I do not have any need for additional income, but do need the cash.

Firstly, I have been told conflicting information about Protected Rights in a SIPP. Apparently from 1 October 2008, SIPPS wil be able to accept PR and investors can then take 25% as tax-free cash. Is this right? If I am right, is my assumption that I can get £33,000 cash then correct?

Secondly, I have been looking on the internet at SIPP providers. Hargreaves Lansdown wont accept the NatWest transfer unless they give me advice at £500. I have told them that I know want I want and am fully aware of the guaranteed nature of the benefits I am giving up, but they still want to advise me. Fidelity wont accept it eiter unless an IFA introduces the business. But I don't want an IFA.

The only firm that seems willing to accept is Sippdeal as it is execution only. My question is, does anyone have expereience of Sippdeal and would they be kind enough to let me have details? Are they competitive? I don't intend to do much dealing/ switching of funds. Will probably look at it every six or so months and then make changes if I feel necessary. I intend to have a low risk portfolio as I would be keen to maintain the £100k that remains invested. Probably no more than 30% in equities.

Thanks in advance.

D

dunstonh

Firstly, I have been told conflicting information about Protected Rights in a SIPP. Apparently from 1 October 2008, SIPPS wil be able to accept PR and investors can then take 25% as tax-free cash. Is this right? If I am right, is my assumption that I can get £33,000 cash then correct?

SIPPs will be allowed under legislation to do it but not all SIPPs may offer it to start with. Personal pensions already allow drawdown on protected rights.

Secondly, I have been looking on the internet at SIPP providers. Hargreaves Lansdown wont accept the NatWest transfer unless they give me advice at £500. I have told them that I know want I want and am fully aware of the guaranteed nature of the benefits I am giving up, but they still want to advise me. Fidelity wont accept it eiter unless an IFA introduces the business. But I don't want an IFA.

The FSA have repeated warnings that they will consider occupational pension transfers as bad advice as the default. This includes execution only business where no advice is given but not enough info obtained to ensure it is the right thing to do. This is because statistically, final salary pension transfer enquiries are likely to be best if left where they are.

Most companies have ceased to do execution only transactions on final salary schemes due to that. I'm surprised sippdeal are doing it considering the FSA has given out this warning twice in the last 6 months.

EdInvestor

rochester2008 wrote: »

I do not have any need for additional income, but do need the cash.

I assume this is what's driving the plan.

Apparently from 1 October 2008, SIPPS wil be able to accept PR and investors can then take 25% as tax-free cash. Is this right? If I am right, is my assumption that I can get £33,000 cash then correct?

Yes

Secondly, I have been looking on the internet at SIPP providers. Hargreaves Lansdown wont accept the NatWest transfer unless they give me advice at £500.

I assume this is a final salary scheme?If so, even if you pay the 500 quid they are likely to refuse to accept it. It might help if you were single and thus the spouse benefits were reducndant, or had spouse with full pension provision, but the actuarial adjustment downwards to take the Natwest pension so young is probably horrific: how much are you losing?

Is there no other way of raising the funds - eg by just activating the other PP into drawdown and taking max income?

My question is, does anyone have expereience of Sippdeal and would they be kind enough to let me have details? Are they competitive?

I have a drawdown SIPP with them.Their charges are very competitive and their service excellent.Highly recommended.

rochester2008

Thanks for your replies Dun and Ed.

One last thing - how safe is my money once invested to Sippdeal? Is it purely based on how the underlying investments perform? I am worried that Sippdeal is not a household name and might go tits up. If Sippdeal did go under would my money be safe?

Thanks in advance.

EdInvestor

Yes, the investments are held in nominee accounts and ringfenced - they are subject to the 48k investment limit.The cash is under the 35k deposit limit. Sippdeal uses HBOS, that should now be fine.

Sippdeal is owned by AJBell and is one of the biggest SIPP providers.