Converting a Defined Benefit scheme

xylophone

(think they said after budget).

After 6 April 2016?

northernsoul

Thanks for reply again kidmugsy and I think I agree with you. It makes sense to take up my personal allowances before i am taxed on income above my personal allowance (ie after i am 60 and drawing my DB pension).
My pension will continue to increase as I draw the other pensions, when what I really want is the same pension amount or slowly decreasing as I get older (cant do as many things). I seem to remember that the advisor said I can not take more than 7.5% out for the first few years of the policy. Cant remember exactly how long but got a feeling its 2 years. If so, at least my lodgers will make up will make up the reduced amount (cant see me having lodgers forever). Then I can take up my full allowance. As you said, would prefer to take up my full allowance but if its the terms of the policy i am stuck unless i go somewhere else. This advisor though, came recommended and i thought he was good.
xylophone - thanks again for the reply. cant find my statement but i think it said after budget just gone.

northernsoul

Maybe i can back date personal allowances?

Freecall

northernsoul wrote: »

Maybe i can back date personal allowances?

You can't do that and that is why kidmugsy et al are suggesting that you use your current personal allowance to the full.

The £10,600 (£11,000 next year) is really valuable to you and once the year is over, it's gone for good. The return on your investments and other aspects of your financial planning are irrelevant.

You have an opportunity to withdraw some money tax free and that opportunity will soon pass. Use it or lose it as they say.

northernsoul

Thanks Freecall. Waiting on a reply from the FSA as to when (if i am correct) i can draw out up to my personal allowance.
If i am correct, and say, it is 2 years, i will have to consider moving to another 'provider' who will allow me to draw £10600 this year and £11K next year

northernsoul

i was wrong. The reply from my FSA is
' Typically at the end of year 6 but it could be sooner depending on the replacement cost tests we do when all the info is in'.
I understood there is no cost to set up this policy (my change from Equitable life to Scottish Widows cost me £5K)
I assumed they have this rule so they have a reasonable value of fund to take out their 1.25% charge ie 1.25 of £75K is much more than 1.25% of, say, £40K

northernsoul

looks like if i go with this FSA i will not be able to take up my personal allowances

xylophone

I take it that your current DC pension provider does not permit drawdown?

Is there a reason why you can't transfer now to another provider and draw down as you wish?

Examples

http://www.hl.co.uk/pensions/drawdown/how-does-it-work

https://www.fidelity.co.uk/investor/retirement/drawdown-pensions-ppc-b.page?gclid=CNWfltLa58YCFRDKtAodzPQMRw

northernsoul

Hi xylophone. i am currently with Scottish Widows. A relative said why don't I see his FSA for advice. This FSA , i believe, represents the fund he suggests i put my DC pension into. He describes what he recommended me as a Drawdown. i am still in the process of switching.
I have not asked Scottish Widows whether it allows 25% tax free lump sum and also taking out up to my personal allowance.
I thought i would get the best advice off this FSA as he came highly recommended and has some well off clients.
May phone Scottish Widows tomorrow.

xylophone

http://www.scottishwidows.co.uk/retirement-planning/pension-options/flexible-pension/

http://www.scottishwidows.co.uk/retirement-planning/pension-options/

http://www.scottishwidows.co.uk/Extranet/Literature/Doc/54858

https://www.pensionwise.gov.uk/

might be worth a read?