unable to transfer protected rights?

gericom10

If I take the 25% TFC from my NU pension plan , and then want to set up income drawdown with the rest, it seems (from what i can see on some threads) that you cannot move the protected rights portion into a Sipp to do this.
if you can't move the PR portion what do you do with it?

dunstonh

You dont need to use a SIPP do to income drawdown. Personal pensions and fund supermarket pensions can do income drawdown and do it on the protected rights as well.

EdInvestor

.....But they will only offer limited investment options and may have higher charges (which can seriously increase the risk of income drawdown).

It is likely that PR money will be allowed into SIPPs next year.So what you could do is split the penion, move the non-PR money over to the SIPP, taking the 25% TFC and the drawdown income, while leaving the PR money invested at the lifeco, until the rules are changed.

It is also possible to invest a PR fund in cash at some SIPPs ( eg at https://www.epml.co.uk) , if that suits you.And of course you can take an annuity.

If you do decide to use any insurance company SIPP lookalike, be very careful to check that you can move your money out to a real SIPP in future if you want to.At present, AFAIK, a PR fund in drawdown cannot be moved.

dunstonh

.....But they will only offer limited investment options and may have higher charges (which can seriously increase the risk of income drawdown).

Two the main providers in this area run fund supermarkets with around 1000 funds each. Both of them can be cheaper than most SIPPs, including the frequent DIY options mentioned on this board. There are plenty that are cheaper, the same or more expensive.

EdInvestor

Two the main providers in this area run fund supermarkets with around 1000 funds each.

That's what I mean.Limited options, only funds.

gericom10

thats a real eye opener!

I did'nt know that you could drawdown on PR with some pension plans, could you name a few I could have a look at to compare against the Sipps that are around?

I still like the idea of waiting in the hope the Sipp rules will change, I have got 18 months before I need to make a decision

dunstonh

I still like the idea of waiting in the hope the Sipp rules will change, I have got 18 months before I need to make a decision

It's been coming for about 4 years. Still not here and no info on when it will be.

That's what I mean.Limited options, only funds.

Its estimated that over 90% of people invest in only funds.

EdInvestor

dunstonh wrote: »

Two the main providers in this area run fund supermarkets with around 1000 funds each. Both of them can be cheaper than most SIPPs, including the frequent DIY options mentioned on this board. There are plenty that are cheaper, the same or more expensive.

The other problem is that usually none of these providers will accepot funds smaller than 100k.

EdInvestor

dunstonh wrote: »

Its estimated that over 90% of people invest in only funds.

Estimated by whom?

Two of the biggest providers are Sippdeal/AJ Bell group (where people mainly invest in shares and commercial property) and Alliance Trust ( where people mainly use investment trusts.)

Of course if you are talking about SIPPs used by IFAs you would be correct as IFAs are not authorised to advise on most types of investment allowed in SIPPs so they would only recommend ones where they could make money (eg Standard Life).

jem16

EdInvestor wrote: »

Of course if you are talking about SIPPs used by IFAs you would be correct as IFAs are not authorised to advise on most types of investment allowed in SIPPs so they would only recommend ones where they could make money (eg Standard Life).

If an IFA is not authorised to advise on something, then obviously he/she can't do so.

However why the dig about them making money Ed? It's so unnecessary and just highlights your anti-IFA stance.

Do/did you work for nothing?

silverfoxuk

jem16 wrote: »

If an IFA is not authorised to advise on something, then obviously he/she can't do so.

However why the dig about them making money Ed? It's so unnecessary and just highlights your anti-IFA stance.

Do/did you work for nothing?

I'm not sure EdInvestor is particularly anti-IFA. Does that make dunstonh pro-IFA?

EdInvestor and dunstonh are just discussing different options. These two are often involved in very informative discussions and I'm sure are both big and ugly enough to take each others valid viewpoint, one from a more regulated/IFA approach to financial decision making and one from the more *DYOR/DIY approach. Both approaches have merits and drawbacks for different people and circumstances/needs at different times. dunstonh's opinions are very informative, but they are given from one angle. Isn't it healthy and enriching to get some thoughts from another angle as well?

I for one find their posts both helpful and informative, so thank-you dunstonh and EdInvestor.

Let the healthy debate(s) continue......

*Do Your Own Research