Stakeholder pension: drawdown and pay in

big_mortgage

Can an over 55 year old drawdown from a stakeholder pension, whilst still making contributions? I understand that it is not a bank account and so this cannot be from the same 'account'/ pot, so they would need to start another. The drawdown would also be in a different tax year, from when the payments were made. Thanks

Alexland

Who is your stakeholder with? The ones I know are targeting an annuity situation and would require you to transfer out to a new pension provider (into a SIPP, etc) to commence drawdown?

dunstonh

Most stakeholders (possible all) do not facilitate income drawdown. So, you would likely need to transfer the pension to another provider that offers it.

Mnd

Just watch the MPAA rules, I understand you can take your 25% tax free with no restrictions, but if you then take any taxable cash in drawdown you with be restricted to £4k per year on your contributions you mention.
However I'm no expert so somebody will confirm if this is correct or not

big_mortgage

Thanks, the provider is scottish widows- and amounts will be only £3600 a year

Linton

big_mortgage wrote: »

Thanks, the provider is scottish widows- and amounts will be only £3600 a year

As soon as you drawdown taxable money (ie anything beyond the 25% tax free) your annual pension contribution limit drops from £40K to £4K.

big_mortgage

Thanks, that wouldnt be a problem

Alexland

big_mortgage wrote: »

Thanks, the provider is scottish widows- and amounts will be only £3600 a year

Interesting, their AMC is high at 1% but that might include around 0.5% for your advisor. Did you set it up with a Scottish Widows representative or via an advisor? Either way have you asked them this question?

Looking at the website they indicate they are willing to support pension freedoms and you can take "one or more pension encashments" but beware of the tax position or any limitations it will create on making further pension contributions to any scheme in particular the MPAA limit of £4,000 per year or £3,600 if you are have low or no earnings.

http://www.scottishwidows.co.uk/retirement/pensions-annuities/stakeholder-pension/

Alex.

big_mortgage

Alexland wrote: »

Interesting, their AMC is high at 1% but that might include around 0.5% for your advisor. Did you set it up with a Scottish Widows representative or via an advisor? Either way have you asked them this question?

http://www.scottishwidows.co.uk/retirement/pensions-annuities/stakeholder-pension/

Alex.

Yes via SW direct, no advisor. No, but i will call them. Not worried about the lower limit upon withdrawal

dunstonh

I checked for someone else the other day and the SW stakeholder only supports UFPLS (partial or full). If partial, its a minimum of £5000 per transaction.

big_mortgage

dunstonh wrote: »

I checked for someone else the other day and the SW stakeholder only supports UFPLS (partial or full). If partial, its a minimum of £5000 per transaction.

Thank you Dunston. :beer: Yes I see this page now:

http://www.scottishwidows.co.uk/existingcustomers/individualpensions/personal_pensions/pension_encashments.html

if that helps anyone. Looks like it'll have to be transferred to a SIPP to withdraw smaller amounts. Preferably no charge for withdrawal and a low or no minimum. As it happens I saw a newspaper ad for Fidelty advertising just this. Looks like it would be easier to invest in a SIPP and still get the tax relief? Assume you can still payin and withdraw simultaneously if they are separate accounts?