Where are the so called pension bank accounts?

zagfles

Malthusian wrote: »

Only if he is planning on cashing in the entire pot to buy an annuity as soon as he hits 55 / his retirement age or cashing in the entire pot in to do something else (unlikely to be a good idea for tax reasons and other reasons well covered elsewhere).

In the absence of any specific information it seems a reasonable assumption that the money is going to be invested for many years up to and during the course of the OP's retirement (i.e. several decades), in which case leaving it in cash will cost thousands of pounds (on another reasonable assumption that the pension fund is of a size worth talking about). It's a free country and if the OP is happy to pay that price then all power to him, but it seems strange in that case to be so hung up about a few hundred pounds in charges.

You obviously missed where I wrote "as an alternative to short term savings". ie not "decades".

stewart_hart

Thanks - perhaps should have provided a little more information initially.
I have three pension "pots":
1. An annuity I am currently receiving.
2. A final salary pension I will get in several years time.
3. The one I mentioned above which I would like to use to add to no (1) and live on until no. (2) is paid, hence my desire to be able to access it regularly over the next few years. This means it needs to be invested in a low risk product. As it is a relatively short period of time hopefully inflation will not erode it too much but paying best part of a thousand pounds each year for looking after my money in a cash SIPP seems a little disproportionate.

Malthusian

I withdraw my comments about investing in cash costing you thousands of pounds as you are one of those who have a good reason for withdrawing their pension fund over a short time period.

You should be able to find a SIPP that will charge you less than a thousand pounds a year. Hargreaves Lansdown for example seems to charge very little for operating a SIPP holding cash only. Other SIPPs are available.

If you need the flexibility of drawdown you may have to be resigned to receiving a small negative guaranteed return. There is no such thing as "free banking" with pensions as there is with personal savings because "free banking" is a loss-leader subsidised by a) people who sign up for expensive packaged accounts and b) people who go overdrawn and pay penalty fees. Pension funds can't go overdrawn or sign up for rip-off travel insurance so there isn't that cross-subsidy.

If you know exactly the amount you want to draw out each year until (2) kicks in you could consider a fixed-term annuity. It would pay you a fixed sum of money each year until the term ended and would then provide either a guaranteed maturity value to transfer into another pension, or expire, depending on how much income you asked for. The rate of return would be absolutely lousy, but it's usually better than zero. The trade-off is that you wouldn't be able to change the income or the term, so they're no good if you want to vary your income.

jamesd

stewart_hart wrote: »

3. The one I mentioned above which I would like to use to add to no (1) and live on until no. (2) is paid, hence my desire to be able to access it regularly over the next few years. This means it needs to be invested in a low risk product. As it is a relatively short period of time hopefully inflation will not erode it too much but paying best part of a thousand pounds each year for looking after my money in a cash SIPP seems a little disproportionate.

Just about any SIPP should provide the features you need to withdraw money as you need it.

Do remember to keep making pension contributions, since there's free money to be had.