AVC & Draw Down

Jinks1956

Hi, I'd welcome advice on what is probably a pretty straight forward query. I have an AVC worth approx £24k with Scottish Widows & another investment of £5000. Am now retired at 62 & am considering taking 25% tax free & reinvesting the rest in draw down. Scottish Widows will manage retirement plan (their draw down) for a 1% fee. My pension, only income, is £9700, payable from October this year. Trying to avoid FA fees, so is the Scottish Widows plan a good one? As I'm under tax threshold I intend to draw down until SP kicks in when I'm 66. Every penny counts as I am a single home owner.
Thanks in anticipation 😀

dunstonh

Scottish Widows will manage retirement plan (their draw down) for a 1% fee.

Although it's not a full advised service. They will guide you to a fund in their range (and SW funds are normally poor quality) and you are paying more than an adviser service (although your value isnt really in the territory for an advised service). Plus, their product is getting long in the tooth.

Trying to avoid FA fees, so is the Scottish Widows plan a good one?

You are avoiding FA fees by using SW. However, you are introducing alternative fees which could well be higher.

Jinks1956

Thanks for your reply.
I find all of this a bit baffling? What would you do if you were me? I have some capital but was considering this route merely to 'deal' with my AVC. Annuity is not a good option.

cfw1994

dunstonh wrote: »

Although it's not a full advised service. They will guide you to a fund in their range (and SW funds are normally poor quality) and you are paying more than an adviser service (although your value isnt really in the territory for an advised service). Plus, their product is getting long in the tooth.

I'm curious which of the main providers would be in a category of "good" (*cough* being with Aviva myself!)
I do believe that Aviva charge less than 1% typically: funds I have are mostly 0.25%, some options go up to 0.81%...I don't believe they charge any more in drawdown, but could be wrong.

<edit>just to add that some comparative fees are here: I guess it is perhaps not the fees but the fund choices that are referred to as poor quality?
https://www.which.co.uk/money/pensions-and-retirement/options-for-cashing-in-your-pensions/income-drawdown/compare-pension-drawdown-plans-and-charges-ax1628r13rdk

dunstonh

I find all of this a bit baffling? What would you do if you were me?

I cant say as I am regulated. I will leave it to others to throw ideas at you. However, as it stands, a simple transactional case through an IFA would be cheaper than the SW option you are looking at.

I'm curious which of the main providers would be in a category of "good" (*cough* being with Aviva myself!)
I do believe that Aviva charge less than 1% typically: funds I have are mostly 0.25%, some options go up to 0.81%...I don't believe they charge any more in drawdown, but could be wrong.

The problem with someone like Aviva is that they have thousands of versions of pensions over the years. And they also priced on different distribution channels. One IFA could have an Aviva product at one price. a different IFA could have another at a different price. They also price retention deals as well. Something around 0.25% for platform and 0.1% upwards for funds. They are whole of market. So, thats about 30,000 investment options at the same prices as other platforms.

Jinks1956

Thanks Dunstohn. I understand your position.