Tax Free lump sum

dunstonh

EdGasket wrote: »

That still does not give them a god-given right to do what they fancy with client's money; especially after the clients complained and were still not allowed out of the Abbey annuities. Neither could they take the 25% tax-free cash that we all believe we will be entitled to. Its an outrageous scam if you ask me !

Whilst I don't agree with abbey life's actions, their stance is rare. Most will just roll on to age 75. However, it sounds like it isnt a personal pension but a retirement annuity contract and the rules on those differ.

However, technically, Abbey have acted on instructions given at the start and as they never got anything to change those instructions, they decided to carry through the original instruction.

I suspect that a complaint made to the FOS would see Abbey unwind the annuity as a goodwill gesture.

It's not a scam. Its a silly person who chose not to read the multiple letters that they would have got telling them what was going to happen. A scam is being caught out unawares. They were told at various points what would happen and their options.

EdGasket

Anyway back to the original thread....
Who would I be best to go with for a SIPP that accepts a transfer in from another scheme which includes protected rights (I understand they all should now but its not clear on the SIPP provider's websites), and where I can withdraw 25% cash and leave the rest in with a deferred drawdown?
So far I am looking at Hargreaves Lansdown, TD Waterhouse, and SIPPDEAL.
Still not clear how much is protected if the company goes under; e.g. HL say its only 48K so does that mean if I have 100K pension with them, I risk losing 52K if they go under, or are they only talking about uninvested money?

EdInvestor

EdGasket wrote: »

So far I am looking at Hargreaves Lansdown, TD Waterhouse, and SIPPDEAL.

Also check Sippdealextra which allows you to use outside brokers.If you trade quite a bit this may be cheaper than plain vanilla Sippdeal.

Still not clear how much is protected if the company goes under; e.g. HL say its only 48K so does that mean if I have 100K pension with them, I risk losing 52K if they go under, or are they only talking about uninvested money?

The rules are basically the ssame as those applying to investment ISAs.You are only protected for uninvested money at the SIPP provider (and even then this might come under the bank being used, and if there are no separate client bank accounts may amount to not a lot.)

jamesd

EdGasket wrote: »

My pensions are now mostly Index-Linked gilts plus some corporate bond funds and a small amount in equities

You should read about what many consider to be a bubble in gilt prices at the moment.

EdGasket

From EdInvestor:
'You are only protected for uninvested money at the SIPP provider'

Are you saying I could lose my entire pension if the company goes under? If that is so then financial soundness would be the uppermost criteria for choosing a pension provider. Are not the underlying assets of the pension funds ring-fenced in some way to protect the pension holder from the provider going bust?

Sippdeal is managed by Andrew Bell; never heard of them and they've only been going for 14 years. Would my money be safe there?

dunstonh

Are not the underlying assets of the pension funds ring-fenced in some way to protect the pension holder from the provider going bust?

In a personal pension or stakeholder, the FSCS protection is 100% of the first £2000 and 90% of the rest with no upper limit. SIPPs get the investment FSCS protection with the cap.

However, if you use unit linked funds or direct investments then they are usually ringfenced with most providers. You can verify it with them if you are not sure.

EdGasket

'SIPPs get the investment FSCS protection with the cap.'
..i.e. a limit of 48K. It would seem therefore that from a safety point of view it would not be worth having too much more than 50K in a SIPP with any one provider. The other side of this is the costs e.g. £150 or so per annum for drawdown; with three different providers, this would incur £450 instead of £150 with one provider. hmmm I'm surprised the pensions are not better protected i.e. totally seperate from the management company's fortunes.

EdInvestor

EdGasket wrote: »

Are you saying I could lose my entire pension if the company goes under?

No, your money invested in funds or shares is in nominee accounts which are not exposed to any risk at the SIPP provider.

The same thing applies to unti linked pensions and the limit is the same.The numbers quoted by dunstonh only apply to pensions invested in With-profits funds.

EdGasket

Ah that makes a lot more sense ! I don't suppose the SIPP providers even have their own 'With Profits funds' do they? Anyway I would be investing directly in shares, gilts, or third-party funds with the remainder of the pension that wasn't taken as cash; though I see even cash earns 1% so may not be worth taking drawdown at all yet in a SIPP !

dunstonh

The same thing applies to unti linked pensions and the limit is the same.The numbers quoted by dunstonh only apply to pensions invested in With-profits funds.

There is still some debate on this as the insurance companies believe that if you used insured funds then the insurance limits apply. If you use unit trusts the investment limits apply. SIPPs that used insured funds state you get insurance FSCS protection.

The FSCS themselves arent sure.