Managing own pension

Fretman12

Hi
I'm retired at 59 with a draw down pension pot of £140K and a future NHS pension at 60. My draw down is managed by a IFA cost of 1.2% with charges of 0 .5% from the company running the platform for the investments.
Is it possible to take my pension pot and not have to invest it just have it held without risk somewhere?
With savings, rent from a house I have plus NHS pensions when I get to 60 I don't need to draw much from this pot. In fact I will be drawing less than the costs of the management of it!

Is this possible? Thank you

Linton

You can take it away from the IFA and invest it yourself. However there is no way of investing without risk. There is always at least one - typically inflation. Many people would take the view that since amost of your expenditure will be covered by guaranteed income you can afford to take a higher risk. Losing some wealth in the short term wont affect your lifestyle.

Note that risk in investing means short term falls, not the danger of losing everything. Provided you invest widely the chance of losing everything is zero, barring global armageddon when anything else other than tins of baked beans would also be of little value.

You can get a platform a lot cheaper than 0.5% on £140K=£700. iii for example would charge £96.

Fretman12

Thanks Linton: Currently I'm in a low to medium risk portfolio which I'm happy with but would prefer a low risk one that I could set up myself and just leave it at that I'm not really interested in making investments. All I require is to set up my draw for each month with an option to raise or lower at certain times of life. TBH Id put it in an ISA or even Premium Bonds if I could. The amount I have will last me for what I need but it seems the industry is geared up against that.

bostonerimus

1.7% fees is ridiculous and you seem to have a good idea of what you need and it should be inexpensive to implement. If you have income from pensions and rent and don't want to risk your capital you could look at things like a ladder of National Savings Bonds. How much income do you want to take and for how long?

OldMusicGuy

I think you could transfer everything to a platform that lets you hold cash at no charge. I am on Hargreaves Lansdown and there is no charge for holding cash. You would of course lose out to inflation but at least your cash would not be at risk of a major market downturn.

BLB53

Is it possible to take my pension pot and not have to invest it just have it held without risk somewhere?

Yes, you can open a SIPP and arrange for you it to be transferred and then manage it yourself.

There is no such thing as 'no risk' but you could hold some in cash and the rest in lower risk investments such as the all-in-one Vanguard Lifestrategy 20 (80% bonds) with charges of 0.22%. The downside of holding too much in cash would be inflation.

If you can get hold of 'DIY Pensions' by J Edwards it will provide an overview of the steps needed to look after the pension yourself and save you a lot of money every year in charges.

So far as a platform, I use AJ Bell Youinvest but also check out the flat-fee providers such as Halifax Sharedeal.

Fretman12

Great these are the ideas I was hoping to be available for me. My plan is to take the full tax free yearly amount from this pot and my house rental (£400). Then at 60 I take a small NHS pension (£300) and adjust/ reduce the original pension draw.

Then add the Sate pension (if still exists by then) would make roughly £1300 a month available, without touching the pension pot, which is enough for my needs as any extra I need I can use savings. This is why I feel I don't need to 'be managed'. Who would I go to set this up set this up for me, or would you suggest my existing IFA? Thanks for the support

Fretman12

Just bought the DIY pensions Kindle version thanks for the heads up. To answer bostonerimus Im happy drawing the 11.500 pa tax free to live on. Time is not important I have NHS + State to come which I can live on with the rental money or I may sell the house at some point if needed

BLB53

Who would I go to set this up set this up for me, or would you suggest my existing IFA?

If you decide to self manage your own pension with a SIPP then select your sipp provider and ask them to send you (or download) a sipp transfer form.

Heres a link to AJ Bell for example but you may decide others are more suitable

https://www.youinvest.co.uk/transferring-to-us

Fretman12

Thanks I'm gong to follow this up and have look at the options

bostonerimus

Fretman12 wrote: »

Just bought the DIY pensions Kindle version thanks for the heads up. To answer bostonerimus Im happy drawing the 11.500 pa tax free to live on. Time is not important I have NHS + State to come which I can live on with the rental money or I may sell the house at some point if needed

If you transfer your money to a personal pension with a low cost platform and put it in something like a ultra short term bond fund to reduce risk and take 11.5k out each year you will eat up your capital 140k capital pretty quickly. You should protect that capital as it gives you a lot of freedom. You need to to a budget and when your income sources come on line with a sensible withdrawal and investment plan.