Transferring Sipp

MoneyGeoff

I have £16K in a HL Sipp which I'm considering transferring into my DC company pension. I've done this a few times before because the company pension has no transaction charges or platform charges. I'm having second thoughts this time though because when I draw down my DC pension (in 9 years time), I will be doing so when I turn 55 - which is only a few days before the end of the tax year. I'll want to be drawing down at least £11,850 (or whatever the amount is by then) in order to utilise that year's personal allowance. I won't have other taxable income in that year.

Now my company don't do draw down. I'll have to transfer it and draw down £11,850 in a very short time window. Is it feasible to do that? Or would it be better to leave the £16K with HL, withdraw it the April of the tax year that I turn 55 and then leave myself more time to sort out the company pension. The downside is paying about £72 per year in platform fees for the next 9 years.

greatkingrat

There is nothing stopping you transferring the money back out of the company scheme before your 55th birthday, even if you are not able to access it immediately.

Prism

Although your company pension has no platform charges, you may find that the equivalent charge is within the funds themselves. For example, my wife has her company pension in Scottish Widows. One of the funds she has is SW Baillie Gifford Japanese which has a charge of 1.42%. The same fund in a SIPP has a charge of 0.6%. So the platform charge is effectively 0.82% for this fund. I would just make sure that is not the case for you.

MK62

MoneyGeoff wrote: »

I will be doing so when I turn 55 - which is only a few days before the end of the tax year. I'll want to be drawing down at least £11,850 (or whatever the amount is by then) in order to utilise that year's personal allowance. I won't have other taxable income in that year.

For clarity, on your 55th birthday, are you saying that you'll have worked for your company for almost a full tax year, but will have had no taxable income from that?


Assuming that's the case, I think if you relied on "normal" methods of arranging a withdrawal, you'd struggle to get it done in time.
I'd have a chat with HL and explain the situation - ask them if they will accept a pre-dated withdrawal instruction on which to act on your 55th birthday?


However, it may be a moot point in the end - the government has stated that the minimum age for pension access will increase to 57 by 2028 (and thereafter will always be 10 years before State Pension age).
AFAIK, there is no specific detail yet about how this will happen, but I think it's very unlikely to be a cliff-edge introduction (ie 55 on 5/4/2028, and 57 on 6/4/2028) - more likely to be phased in gradually, as is the case for SPA rising from 65 to 67.
You also need to factor in that we have at least one general election before then.....and probably several chancellor's.....

dunstonh

I've done this a few times before because the company pension has no transaction charges or platform charges.

That will be because a) its not a platform and b) it doesnt invest in unit trusts but pension funds.

MoneyGeoff

greatkingrat wrote: »

There is nothing stopping you transferring the money back out of the company scheme before your 55th birthday, even if you are not able to access it immediately.

Oh right. That'll work then thanks!

Prism wrote: »

So the platform charge is effectively 0.82% for this fund. I would just make sure that is not the case for you.

It's not the case. The company I work for has been discussed a few times on the forum and they definitely pay the fees. They aren't just hidden.

MK62 wrote: »

For clarity, on your 55th birthday, are you saying that you'll have worked for your company for almost a full tax year, but will have had no taxable income from that?

No I'll be long gone and living off ISAa until I can draw down. I will have no taxable income in that year.

MK62 wrote: »

I'd have a chat with HL and explain the situation - ask them if they will accept a pre-dated withdrawal instruction on which to act on your 55th birthday?

I think I can just transfer the pension way ahead of time as per the first reply.

MK62 wrote: »

However, it may be a moot point in the end - the government has stated that the minimum age for pension access will increase to 57 by 2028 (and thereafter will always be 10 years before State Pension age).

Point taken, I'll look out for that. Although it's not in the legislation currently, and we are now less than 10 years away from that date so the 'we weren't given any warning' brigade will be out in force if it's pushed through quietly.

MoneyGeoff

Oh dear, what a disaster. It took over 2 months for them to transfer the SIPP. They sold my funds straight away so I am £930 down due to being uninvested for so long.

I complained and HL are offering £55 in full and final settlement. Should I accept that or complain again?