Leaving pension fund with Equitable Life

ryoc

I am approaching 60 in July this year and have a pension fund with Equitable Life. I was thinking of taking the 25% cash free lump sum and perhaps leaving the balance with Equitable Life for another 5 years before buying an annuity. Would it best to move the fund to a different pension provider? Canada Life maybe who are linked to Equitable Life? Thanks

jem16

ryoc wrote: »

I was thinking of taking the 25% cash free lump sum and perhaps leaving the balance with Equitable Life for another 5 years before buying an annuity.

Will Equitable Life allow you to do this? Not all providers allow Drawdown. Basically as soon as you take the 25% tax free lump sum you are crystallising the pension and must either use Income Drawdown with a nil income or buy an annuity.

Would it best to move the fund to a different pension provider? Canada Life maybe who are linked to Equitable Life? Thanks

Depends on which provider will do what you are planning on doing.

dunstonh

I was thinking of taking the 25% cash free lump sum and perhaps leaving the balance with Equitable Life for another 5 years before buying an annuity.

You cant. EL dont offer drawdown.

Would it best to move the fund to a different pension provider?

if you want drawdown then you will have to.

Canada Life maybe who are linked to Equitable Life?

Canada Life dont do drawdown on that link.

sandsy

Do you have any guarantees attached to the Equitable Life pension? Eg. Guaranteed annuity rates?

ryoc

jem16 wrote: »

Will Equitable Life allow you to do this? Not all providers allow Drawdown. Basically as soon as you take the 25% tax free lump sum you are crystallising the pension and must either use Income Drawdown with a nil income or buy an annuity.




Depends on which provider will do what you are planning on doing.

Thanks for the reply - I will check with EL on the above

ryoc

dunstonh wrote: »

You cant. EL dont offer drawdown.



if you want drawdown then you will have to.



Canada Life dont do drawdown on that link.

Thanks for the reply - I will check with EL on the above.

ryoc

sandsy wrote: »

Do you have any guarantees attached to the Equitable Life pension? Eg. Guaranteed annuity rates?

Thanks for the reply - Not sure, will check with EL.

woolly_wombat

sandsy wrote: »

Do you have any guarantees attached to the Equitable Life pension? Eg. Guaranteed annuity rates?

GARs were lost in 2002 when the majority of policyholders voted in favour of the Compromise Scheme:
http://www.barnett-waddingham.co.uk/news/2002/03/equitable-life-after-the-compromise/

If it's a with-profits scheme then your policy is likely to have a Guaranteed Investment Return (GIR) of 3.5% pa.

The Telegraph reported in 2012 that the society were considering tempting policyholders to give up their GIRs:
http://www.telegraph.co.uk/finance/personalfinance/savings/9132308/Equitable-Life-moves-to-remove-valuable-guarantees-from-its-400000-with-profits-customers.html

No doubt you will have received a letter from ELAS recently about the potential for boosts to your policy value in the future. The removal of market value adjustments has also been mooted:
http://www.telegraph.co.uk/finance/personalfinance/pensions/10625581/Equitable-to-distribute-200m-to-policyholders.html

The cynic in me cries out that this is another attempt to send younger policyholders on their way before their GIRs kick in at 60.

To return to your query, and based on the assumption that your policy is with-profits and has a GIR, you will have to decide whether to :

1. Stick with Equitable Life - guaranteed 3.5% pa and the possibility of further enhancements in value in the future
2. Transfer to a sipp or to a provider offering drawdown when you reach 60 (not before then or you will lose the possible benefit of the GIR).

ww