TDG Pension Scheme changes

downshifted

I have posted on here previously about my 64 year old husband's small deferred TDG pension - he has a small amount of Defined Benefits (they closed the scheme), and small Defined Contribution and AVC pots.

As at July 2014 there was a TV of £1850 in the DB scheme, £3998 in the DC scheme and £2425 in AVCs

They have now written about the DC element which they say is now worth £4470 - they want to transfer it to a Scottish Widows Trustee Buyout Plan. He can

1 Transfer it into the SW Cautious Pension Investment Approach Fund

2 Transfer into an alternative plan with Scottish Widows

3 Transfer to a new Pension Provider

This does not affect the DB and AVC elements.

We are thinking now may be the time to open a SIPP and transfer all 3 pensions across to that - deciding subsequently whether to leave it invested or draw down.

We don't need the money yet, although as he only has a pension of £2800 pa at the moment he could take quite a bit tax free before his state pension comes in at 65. (I have been the main breadwinner and we use my DB pensions/our savings to live on - he is well provided with widower's pension should I die first)

Does this make sense? Our S&S ISA investments are with Charles Stanley Direct and I see he could open a SIPP with them.

Thank you for any comments

kidmugsy

downshifted wrote: »

We don't need the money yet, although as he only has a pension of £2800 pa at the moment he could take quite a bit tax free before his state pension comes in at 65.

The AVC is either transferable or it isn't: just ask them. Transferring the little DB scheme will probably prove too expensive to be worth it.


Is that £2800 p.a. also a Defined Benefit pension? If so, it would seem to rule out your using Trivial Commutation of the little DB pension, which would otherwise be a neat way out.
http://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum


Lastly, there are provisions that allow the DB scheme to decide to pay off tiny pension rights. I wonder whether it would be worth asking them about that.

downshifted

Thank you for your kind help.

You are correct that the other pension is DB and he does not qualify for Trivial Commutation. I do think the AVC is transferrable and they gave us a value last year.

I will check about the possibility of paying off tiny pension rights.

downshifted

Further to the above I have been looking for a platform that will allow him to transfer in the DC pot and then have flexi draw down - but as it is only £4k I haven't yet found a suitable platform (Fidelity insist on £75k) Any ideas where I can look?

xylophone

If the CETV of the DB pension is under £2000, it might be possible to transfer out without IFA advice?

http://www.thisismoney.co.uk/money/pensions/article-2957135/Watchdog-tries-safeguard-people-giving-final-salary-pensions.html

Would HL be prepared to accept all three into their SIPP? You could ring and enquire?

http://www.hl.co.uk/pensions/sipp/transfer-to-the-vantage-sipp

kidmugsy

xylophone wrote: »

Would HL be prepared to accept all three into their SIPP? You could ring and enquire?

It's worth noting that at this time of year HL are prone to say that their normal minimum transfer in is £5k, but come the summer you could well find that minimum reduced. But as x says, they may welcome your money now anyway.

I have no experience with CSD but they seem to be pretty well thought of. Their old branch incarnation as Charles Stanley used to have an office near my work; I breezed in one day and they gave me some useful free advice. I've had a soft spot for them ever since.

jamesd

The HL minimum transfer in is £1,000 for all pension pots combined. Starting at £5,000 they are currently paying cash to those who transfer in. Because of their account closure charges it is probably not a good idea to use HL for this purpose. The Virgin Money Stakeholder pension is probably more suitable for this purpose. They don't offer drawdown but they do offer uncrystallised funds pension lump sums and more than one of these can be taken if that helps with income tax planning.

It's now impossible for anyone to qualify for trivial commutation for a money purchase pension because that was abolished on 6 April 2015. It now only exists for defined benefit schemes, for which the minimum age has been reduced from 60 to 55. The new pension flexibilities offer the same facility for larger amounts of money.

kidmugsy

jamesd wrote: »

The HL minimum transfer in is £1,000 for all pension pots combined. Starting at £5,000 they are currently paying cash to those who transfer in.

Aha! Thank you.

xylophone

Because of their account closure charges it is probably not a good idea to use HL for this purpose.

The OP has not indicated a desire to close the SIPP once opened but just (possibly) to start taking money from it?

It is the early closure that attracts the large fee?

jamesd

Given the pot sizes involved here and absent tax issues it seems most sensible to rapidly use UFPLS and reinvest within a S&S ISA.

HL has a normal account closure charge of £25 but this is increased to £295 if the account is closed within a year of opening. Taking payments that lead to a balance of less than £1,000 will cause HL to close that specific SIPP account.

xylophone

I wonder would he wish to keep the SIPP open and contribute the
maximum non-earner contribution each year?

Might it benefit him to defer his state pension, especially if he becomes eligible before 6 April next?