Contracting out of S2P via SIPP based question...

[Deleted User]

Please can anyone clarify the following for me...

I am looking to transfer my "protected rights" personal pension from Zurich to a SIPP with Hargreaves Lansdown.

As I understand it, once I do this, I automatically "opt back in" to the S2P. Once the transfer is complete, and my SIPP is up and running; is it then possible to "opt out" of the S2P again, and have the payments put directly into my SIPP, until contracting out is abolished in 2012?

Thanks in advance for any help.

Aegis

Deleted_User wrote: »

Please can anyone clarify the following for me...

I am looking to transfer my "protected rights" personal pension from Zurich to a SIPP with Hargreaves Lansdown.

As I understand it, once I do this, I automatically "opt back in" to the S2P. Once the transfer is complete, and my SIPP is up and running; is it then possible to "opt out" of the S2P again, and have the payments put directly into my SIPP, until contracting out is abolished in 2012?

Thanks in advance for any help.

HL now have the facility to opt out of the state second pension, so yes, you can opt out through them and have the payments go directly to your SIPP.

[Deleted User]

That's good news! Thanks for that Aegis.

Do you happen to know how long I would have to wait to opt out again via HL, once my SIPP was opened?

Just wondering how it works, because you automatically opt back in as soon as you transfer protected rights to a sipp.. Would you maybe have to wait a couple of months or something for the dust to settle, before opting back out again via the HL sipp?

Does anyone know how the process of opting out again via the HL SIPP works please?

Any advice greatly appreciated.

Aegis

You call them up to ask for an illustration, they send it out with a form to sign, you send it back. After 14 days cooling off period, they sort things out for you. As such, plan for 3 weeks total time to get sorted and you're probably going to be good to go.

[Deleted User]

Aegis wrote: »

You call them up to ask for an illustration, they send it out with a form to sign, you send it back. After 14 days cooling off period, they sort things out for you. As such, plan for 3 weeks total time to get sorted and you're probably going to be good to go.

Do I understand correctly then that you can "apply" to opt out again through HL more or less as soon as the SIPP is opened with the transferred funds? I thought you might have to wait a while for the dust to settle, having been automatically opted back in?!

Thanks for your help again.

EdInvestor

Deleted_User wrote: »

Do I understand correctly then that you can "apply" to opt out again through HL more or less as soon as the SIPP is opened with the transferred funds?

Yes........

Aegis

Deleted_User wrote: »

Do I understand correctly then that you can "apply" to opt out again through HL more or less as soon as the SIPP is opened with the transferred funds? I thought you might have to wait a while for the dust to settle, having been automatically opted back in?!

Thanks for your help again.

I would think you can apply again immediately. I've not done this though, so can't say for certain.

[Deleted User]

EdInvestor wrote: »

Yes........

Have you done this yourself; or do you just know that you can?

Many thanks.

dunstonh

Are you sure transferring from Zurich to a SIPP is a good move. Many of the Zurich pensions have no annual management charge on paid up plans. Its impossible to justify it most of the time.

You are effectively going from a dirt cheap plan with zurich to an expensive plan with HL.

EdInvestor

NI rebates are paid out in one lump sum annually usually in October. So there is plenty of time for the issue to be resolved.

[Deleted User]

dunstonh wrote: »

Are you sure transferring from Zurich to a SIPP is a good move. Many of the Zurich pensions have no annual management charge on paid up plans. Its impossible to justify it most of the time.

You are effectively going from a dirt cheap plan with zurich to an expensive plan with HL.

The protected rights pension I have with Zurich is worth about £13K at the last valuation, and is not my only pension provision with Zurich. I also have my "main" pension with them, which is funded by my employer, and worth considerably more. The idea of a SIPP appeals to me with the protected rights pot, and I have no plans to move my main pension away from Zurich.

My protected rights pension is invested in Zurich's "Managed AP" fund, and to be honest, I don't have a clue "where" my money is actually invested. This is why I like the idea of the HL SIPP, because I can decide exactly where to put my money to work, and I'd enjoy having control.

Can I ask why you say that the HL SIPP is expensive? From what I can gather it looks quite reasonable, in terms of costs...

With regard to HL SIPP annual charges, as below, how can you tell which funds incur the 0.5% + vat charge?

<Annual charge 0% on cash and over 1,900 funds.
For all other funds & investments we charge 0.5% + VAT up to a maximum of £200 + VAT per annum>.

If/when I go ahead with opening the SIPP; I am considering going for a high risk strategy (emerging markets etc) initially, as I have time on my side; and I would view the sipp as a "bonus" pension if you like. There is so much choice within a SIPP, and so little choice with Zurich; and that's what I find so appealing.

Comments/opinion welcome. Thanks.