📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

How to get a drawdown without huge expenses

My current pension provider will give me 25% tax free but will not allow me to access the rest on a drawdown. It's only worth just over £22k so annual payments are really not worth having, I need to access it in chunks. My circumstances mean a draw down is the best option for me. How difficult is it for me as an individual, to find someone to transfer it to who will allow a drawdown. How do I even start? I've tried a finance company who wanted £800 to transfer it, to access the 25%, then it's locked for three years when I have to start all over again. That's a lot of fees to access a small amount of money. Any advice would be appreciated. Thanks

Comments

  • dunstonh
    dunstonh Posts: 119,441 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ow difficult is it for me as an individual, to find someone to transfer it to who will allow a drawdown.

    Not at all difficult.
    I've tried a finance company who wanted £800 to transfer it, to access the 25%, then it's locked for three years when I have to start all over again.

    That sounds like a fixed term annuity.
    That's a lot of fees to access a small amount of money.
    It's not a lot of fees. It's probably cheaper than the pension that you paid nothing for directly when you took it out. However, it is the wrong product. You need the right product. Not the wrong one.

    Different providers focus on different products. So, contacting a provider that doesn't offer the product you need could result in your ending up with something unsuitable. you need to focus on what you are after and then using a provider that matches that.
    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.
  • MK62
    MK62 Posts: 1,737 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    If it's a DC pension (defined contribution, aka money purchase) then you can do it yourself - I should think any of the standard DIY SIPP platforms would be fine.
    For pot that size, I'd probably go with Hargreaves Lansdown - they are one of the biggest SIPP providers and the website is very good. Although they charge 0.45%, as opposed to the more common 0.25%, there are no drawdown charges.

    If it's a DB pension (ie defined benefit, aka final salary) then it could be more problematic. Although the rules state you only need professional advice if the transfer is for >£30k, it appears many firms are refusing to take them without advice being given, on any transfer size.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.4K Banking & Borrowing
  • 252.9K Reduce Debt & Boost Income
  • 453.3K Spending & Discounts
  • 243.4K Work, Benefits & Business
  • 597.9K Mortgages, Homes & Bills
  • 176.6K Life & Family
  • 256.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.