Looking for low-fee Flexible Drawdown Pension - I think!

anne99

Hi,

My husband reaches 65 later this year and has three modest pension funds, and only a small amount of other income. I have a reasonable income and a DB pension plan, so he doesn't need an income for the next few years. The plan is to withdraw his pension capital (for a retirement project) in a way that avoids paying income tax over the next three years or so.

Two of the pots are very small, so he plans to cash them in at their maturity date and this will keep his income for this tax year just below his personal allowance. (We know the companies will deduct basic rate tax on 75%, and he will claim this back from HMRC.)

The third, with Prudential, is worth around £20,000. What he plans to do with this is to move it to an arrangement where he can draw an annual flexible amount just less than his personal tax allowance until he has stripped the fund.

Can anyone wise suggest some companies/products we should look at that would offer this, with low fees? HL seems to do this through their Vantage SIPP at 0.45%. Fidelity seems to offer something with no charges, which seems a little strange and I guess I'm not understanding something there.

(For completeness, he has planned to defer his state pension, and he has transferred his Married Allowance of his personal tax allowance to me.)

Any helpful suggestions would be welcomed.

Many thanks

xylophone

http://www.money.co.uk/pensions/income-drawdown-pensions.htm

might provide some comparison help.

kidmugsy

The monevator blog does regular comparisons of costs.

http://monevator.com/find-the-best-online-broker/


Another one you can try is Lang Cat.

mania112

I don't think (but it's worth checking) Pru are on the ball in this regard.

It's possible legislation-wise to do this directly from the Pru pot - it might be worth giving them a call to see.

The term you're looking to ask about is called UFPLS - they'll be surprised you know that term

mania112

oh and I don't know what you read but Fidelity's platform is £40 per year plus 0.25% plus the cost of any investment fund (circa 0.50% let's say for a basic one)

clivep

mania112 wrote: »

oh and I don't know what you read but Fidelity's platform is £40 per year plus 0.25% plus the cost of any investment fund (circa 0.50% let's say for a basic one)

Where are you getting these figures from?

Fidelity's SIPP service fee is 0.35% per annum. Investment fund charges start at under 0.1% for tracker funds. No other charges for set-up/transfer in/transfer out/account closure/UFPLS/drawdown.

greenglide

clivep wrote: »

Fidelity's SIPP service fee is 0.35% per annum. Investment fund charges start at under 0.1% for tracker funds. No other charges for set-up/transfer in/transfer out/account closure/UFPLS/drawdown.

But they require a minimum of £75,000 in the fund to use drawdown according to this - https://www.fidelity.co.uk/static/pdf/personal/pensions/sipp/fidelitysipp-kfd-clientterms.pdf

mania112

Sorry, I was referring to Fidelity's Fund's Network platform which now accepts pensions/drawdown

kidmugsy

Any use?
http://www.dailymail.co.uk/money/investing/article-3223429/I-road-tested-13-largest-fund-supermarkets-best-platform-investment-is.html

dunstonh

kidmugsy wrote: »

Any use?
http://www.dailymail.co.uk/money/investing/article-3223429/I-road-tested-13-largest-fund-supermarkets-best-platform-investment-is.html

Funny how research differs in the DIY side to the IFA side. The FCA would not find the criteria used in that article satisfactory. Plus, these are DIY platforms (the headline could do with adjusting to say that as most of those would not appear in the list if it was done by largest). They do not include the intermediary platforms. So, the data available is likely to be different as the DIY ones dont need to disclose as much. However, I guess when you DIY, you live and die by your own research.

At least this time the Mail used the same "example" charge for the fund across the platforms. Unlike the pensions table where they distorted the charges but giving each provider/platform a different fund charge (despite them all offering the same funds at the same charges - bar the odd superclean).

clivep

greenglide wrote: »

But they require a minimum of £75,000 in the fund to use drawdown according to this - https://www.fidelity.co.uk/static/pdf/personal/pensions/sipp/fidelitysipp-kfd-clientterms.pdf

True, but this only applies to pension drawdown and not to UFPLS (what Fidelity calls uncrystallised withdrawals in their .pdf).

My wife is 61 and I'm 60. We are both retired and our Fidelity SIPPs are being used to utilise our tax allowances until we reach state pension age. Both SIPPs are under £75K and I can confirm that there was no problem in taking our UFPLS withdrawals earlier in this tax year.