75 in August & want £35k lump sum

jrgspilot

I am 75 in August with pension pot of £35k. Provider terms require scheme to terminate and I may get 25% Tax Free and rest must be used to purchase an annuity. I would like lump sum. As total is over £30,000 I cannot take lump sum and provider will not hold money until next year when lump sum would be possible. Where and how can I transfer the money taking 25% tax free now and the rest, which will be taxed, in April 2015?

dunstonh

Provider terms require scheme to terminate and I may get 25% Tax Free and rest must be used to purchase an annuity.

Not quite correct. You dont have to purchase an annuity. However, the provider may not offer all the options available.

Where and how can I transfer the money taking 25% tax free now and the rest, which will be taxed, in April 2015?

You will need to transfer it to a plan that allows capped drawdown. That is most modern personal pensions and SIPPs.

jamesd

Just about any SIPP provider will allow you to transfer in, take a 25% lump sum and go into capped drawdown with the 75%, with no need to buy an annuity. Completely routine feature these days.

mania112

The list is too long to the name them all, but all of the big companies do it - I can't think of any that don't.

Some may not allow investments of under £50k (that's a feature of Prudential, for sure).

The product you're looking for is called Income Drawdown, or Capped Drawdown (both names for the same thing).

mania112

And as for the changes next year which allow for unlimited income withdrawals, we don't know for sure how this will operate (only that you'll need to ensure you DON'T buy an Annuity in the interim).

There is a chance that another transfer will need to take place, but there's not a lot you can do about that now if your existing provider won't hold on for you until then.

kidmugsy

jamesd wrote: »

Just about any SIPP provider will allow you to transfer in, take a 25% lump sum and go into capped drawdown with the 75%, with no need to buy an annuity. Completely routine feature these days.

There's a wide choice of providers: my own experience has been with Hargreaves Lansdown, whose service has been terrific. It's probably not worth going to a lot of trouble to find the cheapest provider if your money is going to be there for less than a year: my impression is that HL's charges are pretty decent for a SIPP of that size. You could always check at two blogs (i) Monevator, and (ii) Lang Cat.