Pension Freedom

bigadaj

DavidRReed wrote: »

I have a substantial pension pot, previously with Halifax but, as I turned 75 recently, they tell me I must transfer this elsewhere.

I have had a free consultation with an IFA who is helpful, but will charge a 2.5% fee for facilitating the move. And an on-line search shows that all other providers do too, with most saying they only deal through IFAs and some asking for a 4% fee!

Is this my ONLY option?

I see this as simply as transferring a bank balance from A to B, why am I having to pay as much as £10,000 for the service?

David R.
London

Is this a defined benefit pension or a defined contribution pot?

If it's just a pension move then amounts above £100k should be possible to move with an ifa for maybe 0.5% but it depends on the nature of the transaction.

There would of course be ongoing costs for management, if you are confident managing your own investments and there's no additional complications with the transfer then you can transfer to a personal pension or sipp at no cost with less than 1% ongoing fees.

dunstonh

I have had a free consultation with an IFA who is helpful, but will charge a 2.5% fee for facilitating the move. And an on-line search shows that all other providers do too, with most saying they only deal through IFAs and some asking for a 4% fee!

Like any profession, the charges will vary. However, do remember that there is no commission any more. The charges you paid on commission contracts were almost certainly higher than the charges you pay on fee based contracts.

Also, the % is relative. Most IFAs will have a tiered percentage with a cap.

I see this as simply as transferring a bank balance from A to B, why am I having to pay as much as £10,000 for the service?

You should never pay that much. Most decent advisers will cap long before then. £1500-£2500 being common for a money purchase transfer (£5k or so for a defined benefit transfer or a high risk transfer where there are safeguarded benefits).

atush

Ask the IFA for a fixed fee, not a %. or find a new IFA.

10K is far too much.

DavidRReed

I have negotiated it down a little, to 2.5% including one year's management, but that is still over £5000, which is too much to me.

I realise an IFA has to make a living, and this is fine IF I need advice, but as I am reasonably compos mentis and fiancially aware, I object to paying to move my own money around!

But thanks for the comments.

David R.
London

SallyG

75 seems to be some sort of magic age for pensions - my drawdown pension gives my "retirement age" as 75 - not anything I asked for - seems to be a requirement ? It also seems I have to die before I'm 75 if I want to pass on my drawdown pension tax-free - after that tax will be due ........is there a reason?
Is it a penalty for living past 75?

dunstonh

75 seems to be some sort of magic age for pensions

it would be as that was the maximum age you could mature a pension.

my drawdown pension gives my "retirement age" as 75 - not anything I asked for - seems to be a requirement ?

If you didnt give an age then they would use 75 as default to reflect the old maximum.

It also seems I have to die before I'm 75 if I want to pass on my drawdown pension tax-free - after that tax will be due ........is there a reason?

The treasury decided that.

It should also be noted that there need not be any tax initially on death. Only if the beneficiaries take money out of the pension will there be tax. If they leave the money in the pension until their retirement, they will be taxed as income at that point.

zagfles

DavidRReed wrote: »

I have negotiated it down a little, to 2.5% including one year's management, but that is still over £5000, which is too much to me.

I realise an IFA has to make a living, and this is fine IF I need advice, but as I am reasonably compos mentis and fiancially aware, I object to paying to move my own money around!

But thanks for the comments.

David R.
London

As above, bigadaj's post, you don't have to use an IFA if the pension is a normal DC/personal pension with no guarantees etc. See for instance http://www.hl.co.uk/pensions/sipp/transfer-to-the-vantage-sipp and there are plenty of other options. Google "snowman's spreadsheet" for a useful tool to compare platform charges. Also google reviews for customer service/admin etc, some are far better than others.