Accessing 25% lump sum before drawing pension

reheat

I'm a few months short of 60, and trying to suss if a Sipp is right for me.

I've a dormant DC pension pot from a previous employer, and would like to access the 25% lump sum now. I do not want to start drawing a pension yet, but instead to leave the remainder invested. But I'm also a stocks&shares retard, and need to leave the fund management to those who (allegedly?!) know how to do it; I just want to say "give me your low risk option". The lump sum would be going into a house purchase, so reasonably good investment.

Added to this, I don't want to be paying over the odds for Sipp and fund management. Is a Sipp the right thing for me to be looking at here, or are there other options? Or no viable options?!

Also, do Sipps offer less safeguards than my existing DC pension pot?

mania112

That is possible. The type of contract your describing is called Income Drawdown and is available in SIPP-style and a PP-style plan.

This would involve a pension transfer, so you will need to check that you're not giving up other benefits, like protected tax free cash or guaranteed annuity rates, because these are lost (if you have them) on transfer.

'safeguards' are identical in a SIPP - unless by safeguards you're referring to the above paragraph?

speak to an adviser, they can be found at https://www.unbiased.co.uk

reheat

mania112 wrote: »

That is possible. The type of contract your describing is called Income Drawdown and is available in SIPP-style and a PP-style plan.

This would involve a pension transfer, so you will need to check that you're not giving up other benefits, like protected tax free cash or guaranteed annuity rates, because these are lost (if you have them) on transfer.

'safeguards' are identical in a SIPP - unless by safeguards you're referring to the above paragraph?

speak to an adviser, they can be found at www.unbiased.co.uk

The contract is a "Trustee Proposed Section 32 Buyout Plan" with Aegon - not sure if that gives any clues.

Linton

Didnt see the section 32 before posting - comments removed

xylophone

https://forums.moneysavingexpert.com/discussion/4130555
might be worth a look.

Be sure that you have read and understood the terms of your S32 - you could consult an IFA with expertise in pensions.

mania112

Section 32 Buyout Plan's are pensions which have transferred the benefits of a previous company plan.

So AEGON now agree to provide you with the benefits that were once offered in a company scheme.

That usually means there are some special benefits that you don't want to give up.

dunstonh

The contract is a "Trustee Proposed Section 32 Buyout Plan" with Aegon - not sure if that gives any clues.

That changes things. You cannot do drawdown on a section 32. It would need to be transferred out. Many S32 have valuable guarantees (some have none or near worthless guarantees). These would be lost on transfer. Some providers wont accept a transfer in from a S32 without an IFA signing off on it first.

reheat

Many thanks everyone. Looks like some financial advice is definitely needed.

atush

Plus, in reference to your OP (before we knew it was a Sect32) you said you were a 'stocks and shares retard'.

So this would indicate a SIPP was never for you, in that those are for people who like to make their own investment decisions.

reheat

atush wrote: »

Plus, in reference to your OP (before we knew it was a Sect32) you said you were a 'stocks and shares retard'.

So this would indicate a SIPP was never for you, in that those are for people who like to make their own investment decisions.

I overlooked to clarify something else, which might make a difference. Once I get to 65, I will use the fund to buy an annuity. What I would not be doing is any kind of draw-down during retirement, and therefore not taking on any responsibility for ensuring the money didn't run out before ... I did. I simply want the money to sit in a low risk managed fund till I'm 65. As I say, the only reason I want to do this is to access the 25% lump sum.