Withdraw, drawdown, sisp? confused

ABN

Due to reach retirement age in May this year and am rather confused as to what to do.

My situation is as follows

Been out of work for the past 10yrs living off of savings, not getting or had any benefits.

Current savings £200k

2 small index linked final salary’s totalling £4k per year.

Pension forecast of £113 + £88 serps per week. But that’s only an esitmate, can’t remember if I opted out for any years.

Pension pot of £140k with Friends Provident (Life) in various different funds/policies.

What I would like to do is take 25% of the Private pension and then draw the remainder out in monthly instalments for the next 5yrs whilst deferring the state pension.

So
Yr1 35K lump sum and 12*£1750 = £51K
Yr2,Yr3,Yr4,Yr5 12*£1750 = £21.000 per yr
Yr6 Start the State Pension.

So questions are

Is this likely to be possible, if so when/what do I have to do.

Is the SP bonus applied to the value when reaching 65 or at the value when starting the pension.

Is the bonus % applied to both parts of the pension I.e. basic and serps

Will the yearly pension increases be applied at base rate, thus reducing the benefit of the bonus, or will the bonus % be applied to any yearly increase.

xylophone

Read https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/372517/dwp024-102014.pdf

re deferring state pension.

You will be drawing your final salary pensions?

http://www88.friendsprovident.com/common_ss/layouts/consumerSubSectionLayout.jhtml?pageId=consumer%2FSitePageSimple%3A2014_budget_impact_on_retirement_plans

may be worth a look.

ABN

Thanks for the links. Think they answered some of the questions re deferring the SP. But still unsure.

Seems from the Friends Life link I won’t be able to do what I want but I really didn’t fully understand what they were saying. Really need the answers in plain English or what I can do to achieve as close to what I want as possible.

I will be taking my final salary pensions as a monthly income. Not taking any lump sum from them or cashing them in.

gadgetmind

Friends Life are currently very limited regards options, but they are setting up a new platform that people can transfer to that will be more flexible.

Of course, others already provide this flexibility, but who knows how quickly flexi access and UFPLS will be rolled out, or what the fees will be.

xylophone

Thanks for the links. Think they answered some of the questions re deferring the SP. But still unsure.

https://forums.moneysavingexpert.com/discussion/2872204

post 30 might help.

xylophone

And do you need to consult an Independent Financial Adviser?

https://www.unbiased.co.uk/

Once you start drawing your pensions you will need to contact HMRC to make sure that your tax coding is correct.

ABN

gadgetmind wrote: »

Of course, others already provide this flexibility, but who knows how quickly flexi access and UFPLS will be rolled out, or what the fees will be.

If I understand it correctly when taking an annuity you can transfer your funds to a different provider should their terms be better.

Would I be able to transfer these funds if another provider provides something closer to what I want but not an annuity?

mgdavid

Yes, as you retire after April this year you can transfer your pot to another provider, take 25% tax-free lump sum then go into Drawdown, taking however much you want, monthly or annually etc. Which will be taxed as income. Or if you want to DIY and are happy to learn and carry out your own investing you can transfer the pot into a SIPP and then take 25% and Drawdown.

ABN

Overall the object of the exercise is to withdraw the pension pot as simply as possible and reasonably tax efficiently whilst deferring the SP. The % increase in the SP over a 5yr period is likely to be greater than an annuity would buy.

mgdavid wrote: »

.... go into Drawdown, taking however much you want, monthly or annually etc.

That sounds like what I want to do BUT everything I read talks about the max you can take out is 120% or if after 2015 150%, of the amount that an annuity would buy. Thats where I am getting very confused

mgdavid wrote: »

Or if you want to DIY and are happy to learn and carry out your own investing you can transfer the pot into a SIPP and then take 25% and Drawdown.

Since I would be happy simply to draw out the current level of funds over the next 5yrs could I simply move the monies to a cash account and hence reduce / eliminate any risk. Whilst understanding that there would not be any growth potential.

xylophone

https://www.hl.co.uk/partners/search/new-pension-rules-changes-2015?theSource=PCGSI&Override=1&adg=G+SIPPENI+BDG&gclid=CKCGr7qEksMCFXQatAodrDcA6g

The HL Factsheet might throw some light?

mgdavid

ABN wrote: »

.....
Since I would be happy simply to draw out the current level of funds over the next 5yrs could I simply move the monies to a cash account and hence reduce / eliminate any risk. Whilst understanding that there would not be any growth potential.

Yes you can move it into a SIPP and leave it in there as uninvested cash.