What should I do

greenglide

One question with this phased drawdown business. If the choice you make doesn't perform particularly well and you continue to draw, say £3,000 to £4,000 up to your personal allowance, isn't there a danger it could very very rapidly be all used up?

Yes there is.

Phased drawdown is fine for a set period (to fill the gap from 60 and 65 when DB pension starts and state pension or spouse pension starts). Drawdown "forever" is a much riskier proposal unless you have a huge pot!

digannio

It sounds like in my case it could be ideal over this period until the State pension kicks in to take advantage of my tax situation now.
The SW pension does include a final bonus which is still payable even if I transfer. It is built into the transfer value figure I get every year.
Many thanks... let the reasearch begin....

atush

You could of course just add 2880 to the SW pension every year til you need to draw it. As this will give you an extra 720/yr ro add to your pot.

Yes, you can (and many want to) run down your phased pot eventually. But you can adjust what you draw to a lower figure if you want to.

You can always change your mind and buy an annuity in the future if the figures look good then.

kidmugsy

One last point: once you've decided that you're going to withdraw everything from a pension (Fidelity, say) over the next two or three years, you might be wise to swap its investments from equities to cash. You don't want its value collapsing during the process when there will be no time for the value to recover.

digannio

Yes, I see the logic in that. There is a cash fund in the Fidelity one but I cannot swap investments in the SW pension. It has to stay in the unitised with profits fund unless, of course, I transfer.
I've noticed from some initial research that some providers won't allow phased drawdown unless your pot is of a certain size.

kidmugsy

digannio wrote: »

Yes, I see the logic in that. There is a cash fund in the Fidelity one but I cannot swap investments in the SW pension. It has to stay in the unitised with profits fund unless, of course, I transfer.
I've noticed from some initial research that some providers won't allow phased drawdown unless your pot is of a certain size.

I'm a fan of Hargreaves Lansdown: their service has been very good for me. Lots of people on here think highly of Cavendish Online. I'm pretty confident that HL allow phased drawdown; you'll just have to check what their charges are when the time comes.

digannio

What I've decided to do is bung £2,880 into the SW pot this financial year to take advantage of the £720 boost and then look at this phased drawdown next year when everything comes out in the wash with the new rules and, I'm sure, new products that will no doubt hit the market. It seems to be in a bit of a state of flux at the moment but well worth close scrutiny once everything is fully sorted and in force. Thanks again for the input - it's been invaluable to set off further research for future plans.