unable to transfer protected rights?

GTG

The majority of my pension funds are invested in Investment Trusts in an Alliance Trust SIPP. My protected rights money has been sitting in a boring Prudential with profits pension.

At what age can I access the PR funds?

I understand from the conversation above that I cannot move it into my SIPP. I'm nearly fifty now and would like to move it to a better performing investment. What are my options?

TIA

dunstonh

I'm nearly fifty now and would like to move it to a better performing investment. What are my options?

Any insured contract will take your protected rights. You wont be able to access investment trusts but you will be able to use pension funds/oeics/UTs and SICAVs (depending on which pension contract you choose).

EdInvestor

You can access the funds (ie take benefits) from age 50, taking the 25% tax free cash. But although it is quite legal to put PR funds into drawdown (whether taking an income or not) you can't put them into a SIPP (yet).

They have to go into an insured scheme.Insurers will not normally take a fund into income drawdown unless it is worth 100k or more and most PR funds are worth less than that.

Hence anyone with the rest of his pension in a SIPP is stymied. Yor have two choices:

1.Buy an annuity with the 75% of the PR fund
2.Move your other fund out of the SIPP and back to an insurance company and then take drawdown for the whole lot at the insurance company with much higher charges and less investment choice.

The third option is to wait, as PR money may be allowed into a SIPPs from the end of this year thus ending this unjustified discrimination.

Dunstonh alleges that there is a 4th option at Selestia as above, BUT there are two problems with that - one is the charges ands the lack of control for the investor (you must use an IFA) and the 2nd is that you may not be able to get out of the contract and into a SIPP later on when the rules change.

For the moment, after checking that your current Pru investment doesn't have any valuable guarantees attached, you could see if there are better funds available at the Pru, and move out of WP for the moment, while waiting for the SIPP rules to change.

BTW note that while you can take benefits from age 50 now, in April 2010 the age goes up to 55. So the window of opportunity may open, and then close again, before reopening a couple of years later.

Crazy,isn't it?

dunstonh

They have to go into an insured scheme.Insurers will not normally take a fund into income drawdown unless it is worth 100k or more and most PR funds are worth less than that.

That is incorrect as has been pointed out before. There are a limited number available that will take less than a 100k (10 will do less than 50k, 4 less than 20k).

Scouser-In-Exile (who works for Selestia) posted on this thread that they will take PR funds from £3600 or more for drawdown.

2.Move your other fund out of the SIPP and back to an insurance company and then take drawdown for the whole lot at the insurance company with much higher charges and less investment choice.

Why higher charges?

Dunstonh alleges that there is a 4th option at Selestia as above, BUT there are two problems with that - one is the charges ands the lack of control for the investor (you must use an IFA) and the 2nd is that you may not be able to get out of the contract and into a SIPP later on when the rules change.

"alleges"???? I am not the one posting inaccurate information.

Selestia can beat HL on charges or be mostly comparable and the lack of control will not be an issue as internet access is coming with the new Selestia platform. In the interim, fund switches requests can be phoned or emailed. The control is still there for the individual to pick and switch funds as they wish. If the rules change on SIPPs and PR then it wont be a problem to move if you desire to as the same rules would apply to both PR and OR.

I'm afraid Ed, that I just see your comments as sour grapes that an IFA can undercut the companies that you promote as being low cost.

GTG

Phew, I think I need to go and lie down.

dunstonh wrote:

"Any insured contract will take your protected rights. You wont be able to access investment trusts but you will be able to use pension funds/oeics/UTs and SICAVs (depending on which pension contract you choose)."

Sorry, SICAVs?

Is there some where I can view a list of "insured schemes" so as to know what my options are?

One other thing, if I "cash in" my funds and take an annuity and invest my cash in a new pension will I get the tax credits again.

EdInvestor

dunstonh wrote: »

That is incorrect as has been pointed out before. There are a limited number available that will take less than a 100k (10 will do less than 50k, 4 less than 20k).

And still we are not told who these providers are.Other than Selestia.

Why higher charges?

You have to pay the IFA and the the fee for the wrapper,whcih is free at places like AT and Sippdeal. In any cash the Selesta offering isn't comparable with a SIPP as it only offers unit trust type funds.Many people in SIPPs are there to access all the other investment options which can offer much lower costs.

This is particularly important for drawdown, as high charges considerably increase the risk.

dunstonh

Sorry, SICAVs?

Offshore funds.

Is there some where I can view a list of "insured schemes" so as to know what my options are?

Any IFA can provide you with a list.

One other thing, if I "cash in" my funds and take an annuity and invest my cash in a new pension will I get the tax credits again.

You have to be careful of recycling rules. If the re-investment into a pension comes from income then you are fine.

And still we are not told who these providers are.Other than Selestia.

I why should I post that information?

You have to pay the IFA and the the fee for the wrapper,whcih is free at places like AT and Sippdeal.

If its execution only, most IFAs will be happy with the trail with no initial commission. As the unit trust funds have the same annual management charge in Selestia as they do in HL then there is no difference. Indeed, get an IFA that is also willing to take nominated trail, say at 0.25% then you will find that the annual management charges are lower with Selestia.

In any cash the Selesta offering isn't comparable with a SIPP as it only offers unit trust type funds.Many people in SIPPs are there to access all the other investment options which can offer much lower costs.

Where they want external investments, that is the case but most post A day applications use unit trust funds. So, there is no difference on that front.

This is particularly important for drawdown, as high charges considerably increase the risk.

The reduction in yield on standard terms between a non advice case and advice case is actually very little. Usually the only difference is the fee at the start. Larger funds may very well so that heavily rebated as the trail commission is more valuable.

scouser_in_exile

Post Edited

scouser_in_exile

Post Edited

EdInvestor

dunstonh wrote: »

Any IFA can provide you with a list.

Well go on then.

why should I post that information?

Why wouldn't you? You're happy to post information about other things. Investigations that I know of so far (including by an IFA seeking to place his own PR pension in drawdown) have not located any examples of firms offering drawdown for small PR funds on their own except Selestia.

Now's your chance to demonstate your superior knowledge DH.