Flexible Drawdown

mudman

I am 65 in a few weeks time. I have a dormant (No payment in for 3/4 years) Standard Life Stakeholder pension with a current value of £27K.
Having read details about flexible drawdown I meet all the criteria with my occupation and state pension totalling in excess of 25k per annum (MIR £20k) for next financial year. I realise I can take 25% tax free now and buy an annuity with the remainder - but having recovered from cancer a few years ago, the flexible drawdown, taking cash sums (taxable) over a few years to keep within my 20% tax allowance is my preferred route. Sadly when I wrote to SL last year they stated they may have a scheme running early this year. A phone call today stated they don't know whether they will offer flexible drawdown. Do I wait and hope that they do or is there any other way for another company to provide flexible drawdown.

Zelazny

You could transfer to another provider that does offer flexible drawdown, but there would likely be fees involved. Whether it is worthwhile with a pot of £27k is something I don't know.

mickyrod

Hi Mudman,

I am in a similar situation. I will be taking early retirement in June and have a pension under defined benifit of over £30k, plus four years of payment into an L&G purchase scheme (the company froze the DB scheme) Approx £65k.

L&G will not enable me to take flexible drawdown, so I have found a company that will. They charge around £450 to take on the L&G money and convert to flexible d down. I was planning to take flexible drawdown over a 4 year period to avoid 40% tax, but am now thinking to just take the lot and pay around 30% on the pot (taking into consideration the 25% lump sum)

Looking at your figures you could take the lot over 2 years and only pay 20% tax. I am not sure if the charges apply every year that they hold your money (£450 a year) I assume that they do.

atush

I would also look at the enhanced annuity route. AS you had cancer, you may be eligible for an increased annuity. Compare this with the drawdown before you make your decision. But DD will be best if you have a spouse probably.

5-Star

mickyrod wrote: »

L&G will not enable me to take flexible drawdown, so I have found a company that will.

Like you I am also with L&G and am considering flexible drawdown - who are the company that you've found?

mickyrod

Hi 5-Star

Hargreaves Lansdown.

mudman

Thanks for replies so far. As, thankfully I have no problems since my NHL, I don't think I would be eligible for enhanced annuity. I understand that I will have to have income above the MIR of 20k in the financial year of flexible drawdown if taken, which I do not meet until my state pension later this month. Some financial sites state that Standard Life are considering a flexible drawdown scheme this year (but they said that last year) so I can wait the 12 months to meet the MIR properly before making a decision. Can anyone add weight to Standard Life possibly commencing flexible drawdown this year?