Pension fund 25% cash drawdown

PennyBorder

Hello

I have a Norwich Union Stakeholder pension with a value of approx 100k. I am looking to take the 25% cash lump sum. Could anyone tell me what happens to the other 75%. Do I have to buy an annuity or can I hold it in a fund until I retire. I am 52 at the moment and looking to retire at 60.
Thanks for your help.

Andy_L

With a stakeholder you have to use the remaining 75% to buy an annuity. You could transfer the pension to either a SIPP (Self Invested Personal Pension) or (some) Personal Pensions which will allow you to do "drawdown" where you can leave the remaining 75% invested, drawing an income from it if you wish, although ultimatly having to buy an annuity.
This may or may not be a good idea, depending on a number of factors e.g.: attitude to risk, investing experience, other income, tax situation, existance of dependants/spouse etc.

PennyBorder

Thanks Andy, I do not need to buy an annuity at present as I am in full time employment. I am not a risk taker and I would prefer to put it into a low risk fund. Can you suggest a company that will allow me to drawdown and leave the remaining money invested?

whiteflag_3

Andy_L wrote: »

With a stakeholder you have to use the remaining 75% to buy an annuity. You could transfer the pension to either a SIPP (Self Invested Personal Pension) or (some) Personal Pensions which will allow you to do "drawdown" where you can leave the remaining 75% invested, drawing an income from it if you wish, although ultimatly having to buy an annuity.
This may or may not be a good idea, depending on a number of factors e.g.: attitude to risk, investing experience, other income, tax situation, existance of dependants/spouse etc.

Oh no, here we go again!

You dont have to transfer to a SIPP.

Have a look at the stickys , there is stacks of info on drawdown etc there.

EdInvestor

PennyBorder wrote: »

Can you suggest a company that will allow me to drawdown and leave the remaining money invested?

https://www.h-l.co.uk
https://www.sippdeal.co.uk
https://www.alliancetrust.co.uk

whiteflag_3

EdInvestor wrote: »

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

Are you allowed to make recommendations on this forum?

EdInvestor

The three companies listed are the lowest cost SIPPs for drawdown.

I can recommend Sippdeal from personal experience but it is cheapest for those who want to invest in shares,ITs,ETFs, not in unit trusts/funds.

For the size of drawdown mentioned the new deal at AT may well be the cheapest for fund investors.

whiteflag_3

EdInvestor wrote: »

The three companies listed are the lowest cost SIPPs for drawdown.

It would be nice if you could provide evidence to back this up , please?

EdInvestor

Useful article from Martin to start with:

http://www.moneysavingexpert.com/savings/cheap-sipps

dunstonh

NU have a drawdown option that takes internal transfers (as well as external) and you can transfer to that and it will be cheaper than a SIPP. They are not the only one either.

There is no requirement for you to go to a SIPP and pay higher charges.

EdInvestor

dunstonh wrote: »

NU have a drawdown option that takes internal transfers (as well as external) and you can transfer to that and it will be cheaper than a SIPP.

Usually insurance company drawdowns are more expensive than low-cost SIPPs. Also, insurance company drawdowns often require a minimum fund of 100k.Also you have to use an IFA and pay his costs as well..

There is no requirement for you to go to a SIPP and pay higher charges.

You will pay lower charges for drawdown in a SIPP at the providers I mention and there is no need to get an IFA involved ( who will typically want 3% of your fund just for writing a couple of letters which you can easily do yourself.) Since you only want a simple transfer to get the 25% tax free cash and then reinvest the money in much the same way as it is invested now, why pay thousands of pounds for so-called "advice" when all that's involved is writing a couple of letters?

HL drawdown charges

Basically you will pay 75 quid to have the fund initially valued, that's it.