Transferring Pension Pot to a Sipp for Income Drawdown

Kaliko

Hi,

I have about £200k in a few different DC pension plans (managed by the providers). I am about to retire.

I would like to go the income drawdown route, and I would like to do it through a SIPP.

I have a few questions, and I'm hoping for a little advice.



1. SIPP Protection from the FCSC

As I understand it, in the event of fraud at my SIPP provider, the FCSC will only protect my first £50,000. Is that correct?

If so, would it make sense to split my pension into 4 different SIPPs? I know the charges might be higher, but it worries me that if some fraud or some such occurs at my SIPP provider, then I'll lose the lot. Especially as many of the best SIPP providers seem to be the smaller names.




2. What are the best SIPP providers? I don't plan to do a lot of share dealing - just basic low -medium risk holdings in debt and equities.

As I understand it, Hargreaves Lansdown are cheap (though they don’t rebate any trail commission) and seem to have good feedback, and Alliance too (though I understand that they’re better for people who want to do a lot of trading, which I don’t). Any other recommendations/tips? I couldn't find a SIPP's provider recommendation thread.



3. I keep hearing about RDR. As I understand it, this will kick in 2013, and stop the practice of trail commission. How will this affect my SIPP choices. Also, should I then wait until next year to vest my pension?



4. Here is my understanding of what happens on my death:

my wife will continue to be able to take the income drawdown (based on her own GAD calculations). And there will be no 55% tax charge to her. The 55% charge will only kick in once both my wife and I have passed away, and any remaining of my pension pot passes to my kids.

Is this correct?



And help/advice appreciated.
Thanks

DavidLaGuardia

1. The FSCS protects per investment company not per SIPP. The SIPP holds them in trust for you. Also how relevant is the protection? That depends on the investment structure. Unlike deposits and some more complex investments Unit Trusts and OEICs are held separately from the investment companies assets so your risk is in usually investmnts themselves and would be tkane over the the companyh went bust - depends on what's bein used.

2. Do you feel confident in this as a DIY excercise? From your questions it would suggest you shouldn't be. With something like drawdown ditching good initial and ongoing advice specific to you is like ditching your GP for a Family Medical encyclopedia. Seek advice but don't deal with quacks!

3. Most good products are RDR ready so this shouldn''t be an issue. Investments held before this time can have trail until they are changed, but it doen't mean lower fees in all cases.

4. Correct