Transfer Scottish Widows pension to SIPP?

inflationbuster

Hello,

I have a Scottish Widows pension, which is paid up.

I believe it's invested in the following fund,
SCOT WID CONSENSUS PN S2

http://www.trustnet.com/Factsheets/Factsheet.aspx?univ=P&fundCode=SWCMP&pagetype=overview

Unit price showing in my account is 176 value is £51K.

Annual charge appears to be 1%.

I'm thinking of getting a AJ Bell SIPP and managing the pension myself.

I've been trading stocks successfully over a 7 year period so am confident l can manage the pension myself.

1. The current pension has a retirement age of 60 so am l right in understanding l could lower this to 55 with a SIPP?

2. Are there any pitfalls l should be aware of? I do have a company pension separate to do this, which has 12% per annum being paid into it.

Many thanks

kidmugsy

inflationbuster wrote: »

1. The current pension has a retirement age of 60 so am l right in understanding l could lower this to 55 with a SIPP?

I speak as an amateur, but I think the pension age of 60 that you quote is used only in their illustration calculations: the size of annuity you might buy at 60, and so on. You would be free to take the pension at 55. But if you want the lower management charge of DIY, a SIPP might be a good idea. You'd want to check that you wouldn't be giving up anything attractive, such as a GAR (guaranteed annuity rate).

dunstonh

I speak as an amateur, but I think the pension age of 60 that you quote is used only in their illustration calculations: the size of annuity you might buy at 60, and so on.

Correct. Only on some section 32 buy out bonds and hybrid plans does the actual selected age have a possible commitment.

inflationbuster

OK thanks.

I'm going to leave my company pensions arrangement the same. Am l personally allowed to contribute into my SIPP, say a few K a year? One presumes l will need to inform HMRC of this.

jem16

inflationbuster wrote: »

Am l personally allowed to contribute into my SIPP, say a few K a year?

Yes provided you stay with the annual limit for all contributions of £40k and the tax relief limit of 100% of your earnings.

One presumes l will need to inform HMRC of this.

Not unless you need to claim higher rate tax relief.

[Deleted User]

I'm in a similar situation but my query is more basic.
If I transfer the SW pension to a SIPP what physically happens - are the shares in my existing pension sold and then the cash transferred leaving me to buy my own shares or are the existing shares transferred to the SIPP ?
Apologies if this is a dumb question but I really don't know the answer.

digannio

You get whatever the transfer value is at the time and then you invest where you want in the SIPP. I've just moved my SW personal pension pot and set up a SIPP with HL. It took about ten days to be sorted.

inflationbuster

jem16 wrote: »

Not unless you need to claim higher rate tax relief.

OK thanks.

I pay a higher rate of tax. Does that mean they simply adjust my tax code or do the HMRC refund me some money?

inflationbuster

digannio wrote: »

You get whatever the transfer value is at the time and then you invest where you want in the SIPP. I've just sold my SW personal pension, set up a SIPP with HL. It took about ten days to be sorted.

Good to know, that's very quick.

digannio

I think when HL have a cash pot in their eyes they harass the life out of the old provider until they give in and hand it over:D

kangoora

inflationbuster wrote: »

OK thanks.

I pay a higher rate of tax. Does that mean they simply adjust my tax code or do the HMRC refund me some money?

It depends on when you call them really and how much it is. One year I informed them of a lump sum pension payment late (in February) and got a cheque in the post. The next year I did it in September, when the payment went into the pension, and I got a tax code adjustment.

If you are going to make regular monthly payments and you tell them early enough they will probably just adjust your tax code.