Taking lump sum payment

MOUNTY

When the time comes for myself to take my 25% lump sum payment can i request it can be taken from one fund providing sufficient value is in or will it be taken from Percentage of all funds.
Will it better to switch the appx value into cash the month before?

atush

do you have one pension or several?

If all your money is in one pot, you can choose which funds are reduced/cashed in to make the payment.

As to going to all cash, not suitable if you are proceeding into DD. But would be if you will then proceed to withdraw the rest of the funds over a short period of time.

Of course what funds/assets to choose for DD will differ from t he accumulation phase of retirement.

Linton

MOUNTY wrote: »

When the time comes for myself to take my 25% lump sum payment can i request it can be taken from one fund providing sufficient value is in or will it be taken from Percentage of all funds.
Will it better to switch the appx value into cash the month before?

In my experience if you want cash from an investment pot it is your responsibility to ensure the cash is available in the account when required.

dunroving

If someone is in 4 different DC pension schemes with different providers, is there any way to calculate the total value of the 4 pensions, then calculate 25% and take this all from one of the pensions? Or do the financial institutions make this difficult?

I'm thinking for example, if someone wants to stick with the fund options in pension 1, 2 and 3 and doesn't like the fund choices in Pension 4 so wants to take the 25% tax-free lump (25% of the sum value of all 4 pensions) all from pension 4.

Not sure if that's the same as is being asked in the original post as the question was about different "funds" (which could mean different funds within a single pension).

atush

It has nothing to do with the financial institutions, it is to due with regulations.

You can take 25% of each pot TF, or you can merge all 4 pensions and take 25% from the total.

You can even take each pot one at a time over different tax years. One pot might have valuable guarantees you would lose if you transferred.

greenglide

If you are in four schemes the lump sums come from the separate schemes - you can't "mix and match".

You could transfer all the money into one scheme but what is the point? At the end of the day 25% is 25% no matter who pays it?

MOUNTY

dunroving wrote: »

If someone is in 4 different DC pension schemes with different providers, is there any way to calculate the total value of the 4 pensions, then calculate 25% and take this all from one of the pensions? Or do the financial institutions make this difficult?

I'm thinking for example, if someone wants to stick with the fund options in pension 1, 2 and 3 and doesn't like the fund choices in Pension 4 so wants to take the 25% tax-free lump (25% of the sum value of all 4 pensions) all from pension 4.

Not sure if that's the same as is being asked in the original post as the question was about different "funds" (which could mean different funds within a single pension).

Single pension with five funds.

MOUNTY

atush wrote: »

do you have one pension or several?

If all your money is in one pot, you can choose which funds are reduced/cashed in to make the payment.

As to going to all cash, not suitable if you are proceeding into DD. But would be if you will then proceed to withdraw the rest of the funds over a short period of time.

Of course what funds/assets to choose for DD will differ from t he accumulation phase of retirement.

Take lump sum, reinvest into S&S ISA, remainder to stay invested and withraw as and when required later.

MOUNTY

atush wrote: »

do you have one pension or several?

If all your money is in one pot, you can choose which funds are reduced/cashed in to make the payment.

As to going to all cash, not suitable if you are proceeding into DD. But would be if you will then proceed to withdraw the rest of the funds over a short period of time.

Of course what funds/assets to choose for DD will differ from t he accumulation phase of retirement.

The 25% to be held in cash prior to withdraw.

dunroving

atush wrote: »

It has nothing to do with the financial institutions, it is to due with regulations.

You can take 25% of each pot TF, or you can merge all 4 pensions and take 25% from the total.

You can even take each pot one at a time over different tax years. One pot might have valuable guarantees you would lose if you transferred.

From my experiences with my work plans (combination of DB and DC plans) I had realised that as far as regulations were concerned, you are allowed to take 25% of the value of your total pension value as tax-free cash. I was wondering more whether, if it was beneficial to do so you could take the 25% of the overall value of your pensions from one pot.

greenglide wrote: »

If you are in four schemes the lump sums come from the separate schemes - you can't "mix and match".

You could transfer all the money into one scheme but what is the point? At the end of the day 25% is 25% no matter who pays it?

OK, thanks, I think that answers my question.

In terms of the point of why I was asking, I was thinking that depending on what the pots are, it might not be possible to roll them all into one. In that situation it might be better to take the cash from the worst (least flexible/fewer choices) pot.

Semi-hypothetical situation: I pay into a employer-sponsored money-purchase AVC scheme with Pru direct from my salary. So far, so good (decent growth), but the choice of investments is very limited (single digits, IIRC). My understanding is that because this is an employer-linked DC scheme, I can't transfer it to an external pension. [I could be very wrong on this - I haven't looked into it because at the moment I am not thinking of doing this]

If I opened a SIPP with Fidelity, I now have two pots, that (if I am correct on the above) I can't roll together (can't transfer one into the other or vice versa). A Fidelity SIPP offers countless more investment options.

At retirement, say I have £50k with the Pru and £150k with Fidelity, I was wondering if it was possible to take the £50k (25% of total pot of £200k) from Pru as the lump sum? From your mix-and-match comment, I'm guessing the answer is "No".

mgdavid

Whilst you are still employed it is an employer-sponsored pension scheme so you have to go with the flow and follow their rules. At retirement you can transfer the Pru pot into your SIPP.