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Annuity fund

Newly_retired
Posts: 3,101 Forumite


I know I can take 25% of my annuity fund as tax free cash but do I have to decide on my annuity at the same time?
As decisions will have to be taken within 14 days of getting the figures through I need to be ready with all my options.
As decisions will have to be taken within 14 days of getting the figures through I need to be ready with all my options.
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Comments
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No.But if you want to delay taking an income, you have to move the fund into income drawdown, which usually means a transfer to a SIPP.Trying to keep it simple...0
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As decisions will have to be taken within 14 days of getting the figures through I need to be ready with all my options
You can do income drawdown by transferring to a personal pension or SIPP and take zero income if you wish.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Thanks dunstonh. My letter says the figures will only be valid for 14 days, that's why I said I would have to decide within 14 days. I can see now that I have aslong as I like.
Can I just leave the fund where it is for the time being?0 -
Newly_retired wrote: »Can I just leave the fund where it is for the time being?
You can defer the whole thing but you can't take the tax free cash without moving to drawdown.If you do defer, and if the pension is a With-profits one, make sure your new retirement date is set for next year, not aged 75 as is common.If you don't, Standard may well charge you an MVA penalty to leave next year on the basis it's not your contractual retirment date.
Quite a few have been caught out by this ploy. :mad:Trying to keep it simple...0 -
I'm already 18 months over my initial contractual date as I continued working and paying into my main pension which is now finished, as is my AVC. No mention of imposing an MVA - they say it is not usual to do so, though when I carried on past Normal Retirement Date I do recall something about them resetting it to 75. Will this make a difference?0
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EdInvestor wrote: »You can defer the whole thing but you can't take the tax free cash without moving to drawdown.If you do defer, and if the pension is a With-profits one, make sure your new retirement date is set for next year, not aged 75 as is common.If you don't, Standard may well charge you an MVA penalty to leave next year on the basis it's not your contractual retirment date.
Quite a few have been caught out by this ploy. :mad:
MVA is only applied to transfers. Taking retirement of tfc & an annuity or an omo before your selected retirement date counts as a matures. They are generally set to an age the policy holder selects e.g 75 but you can take retirement at any time after 50 without getting a penalty. I work in pensions and the only time you get charged is transfering to another scheme.£2009 wins - Vodkat Cocktail kit :j
Quidco: £401.37 (£15 admin fees deducted) / Piggy Points: 3000 + £100 boots vouchers / Ipoints18,3980 -
Newly_retired wrote: »I'm already 18 months over my initial contractual date as I continued working and paying into my main pension which is now finished, as is my AVC. No mention of imposing an MVA - they say it is not usual to do so, though when I carried on past Normal Retirement Date I do recall something about them resetting it to 75. Will this make a difference?
It makes no difference, it just means if you don't contact them to request a quote before you're 75th birthday they will issued you out options 6 weeks(ish) before your 75th birthday the reason being you can't take tax free cash on or after your 75th birthday. You can take your retirement at any time until then with no charges£2009 wins - Vodkat Cocktail kit :j
Quidco: £401.37 (£15 admin fees deducted) / Piggy Points: 3000 + £100 boots vouchers / Ipoints18,3980 -
People moving to income drawdown have been deemed to be transferring, not taking benefits and have been hit by MVAs at Standard life.In the past people who have deferred and had their new retirement date reset automatically to 75 have also been hit by an MVA when they wanted to take benefits a few years after the original deferral.
Check it out. Don't take anything for granted.Trying to keep it simple...0 -
Standard Life charge a penalty on transfers unless it is done on open market option. So, doing drawdown would see a penalty levied as that uses transfer and not open market option.
Where there are multiple plans (such as AVC and pension) and you want to do an open market option on both, then many providers will not allow that and you have to use transfer to combine them. Its the same principle but uses slightly different paperwork. The exception is with Standard Life who treat transfer for immediate commencement as a pension transfer.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Standard Life charge a penalty on transfers unless it is done on open market option. So, doing drawdown would see a penalty levied as that uses transfer and not open market option.
I beleive this can be overcome thorugh getting Standard Life to issue the Tax Free cash then transfer the remaning fund to the company offering the drawdown contract by getting Standard to proved certified figures based on the date, the precise value etc. tocorrespond with GAD rates. The new company then uses these figures as if it had issued the TFC itself and Standard Life treat it as an Open Market Opton.
It is nevertheless a disgace tha Standard are applying rates after the end date i.e. retirement.0
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