What should I do with my St James Place pension fund?

carol428

Hi, I have a St James Place pension fund worth £188K (commenced more than 25 years ago). I understand that St James Place impose high fees and therefore believe that my money would be better elsewhere. I will be aged 55 this month, so I believe that I am now at an age where I should be able to move the money elsewhere without incurring an exit fee. I however have no idea what to do with the money. I work full time and also have a good company pension and do not intend to retire for several years. I have no mortgage, no dependants and am financially secure at the moment (salary currently c.40k) , and would like to continue to be in my retirement. I think that the best thing may be therefore to transfer the money to another pension scheme, but how do I know which one? And how easy is it to do that? I do not want to put all my eggs in one basket, so would prefer to keep this pension money separate from my company's pension. Any suggestions gratefully received, thank you.

whatsup7

Hi Carol, I presume your money is in a sipp with st James, irs straight forward to move to a low cost Sipp platform like interactive investor, which is low cost.
Just contact both parties and fill the forms in, you can move the funds in specie, which means they are still invested.
Some better informed people will be along shortly to correct me and help you .

xylophone

http://monevator.com/compare-uk-cheapest-online-brokers/

mark55man

The significance of 55 is that's when you can start drawing it. You are/were free to move providers at any time.

If you dont use ISA's currently it might make sense to crystallise your tax free lump sum and put it in ISA to get the most of ISA tax regime which is tax on the way in not the way out (unlike pension which is tax free on the way in and taxed on the way out).

However (as I understand it) if you withdraw any amount above the tax free amount you will do two things:
1. Have to pay tax on it at your current marginal rate
2. significantly reduce the amount of money you can pay into your other schemes (from 30,000 to 4,000 or sum such

So be careful you are moving provders (good idea), possibly taking some tax free lump sum (possibly OK) but NOT cashing it in and redeploying it

HTH - not an expert, not even a gifted amateur, but I think the above is true

dunstonh

SJP use a PPP as their wrapper. Not a SIPP. No point them using a SIPP as they only sell own-brand funds.

I however have no idea what to do with the money.

This is a key thing. Your choice going foward is
a) stay where you are. SJP should be reviewing it (seeing an adviser once every year or so) and you can keep doing it. Even though its limited ane expesnive.
b) Use a local IFA to take it over and move it to something more suitable.
c) DIY - you do it.

DIY has the potential to be the cheapest option but like all forms of DIY, you need to know what you are doing.

option a is not desirable. that leaves b & c. Do you pay for an IFA or do you put the effort in to learn and understand to allow you DIY.

Albermarle

.

significantly reduce the amount of money you can pay into your other schemes (from 30,000 to 4,000 or sum such

For the OP. I think this is the most significant point, so I will repeat it .
If you cash in the SJP pension ( or if you move it and then cashit in, it makes no difference ) and take £1 more than the tax free sum , then you could find restrictions on how much you or your employer will be able to pay in to your workplace pension in future . This is because people taking already pensions ( beyong the tax free cash )are then heavily restricted on how much they can continue to contribute to another pension.
So more research or advice would be a good idea before you do anything.

xylophone

Regarding MPAA (and alternative MPAA for those with DB pensions to which contributions are still being made).

https://www.scottishwidows.co.uk/extranet/financial-planning/techtalk/news/MPAA

sandsy

Are you still contributing to this pension with SJP?
You need to check with SJP about the exit fees if you decide to move it.
Their exit fees seem to be different to everyone else's and aren't necessarily disapplied at 55.

wjr4

mark88man wrote: »

If you dont use ISA's currently it might make sense to crystallise your tax free lump sum and put it in ISA to get the most of ISA tax regime which is tax on the way in not the way out (unlike pension which is tax free on the way in and taxed on the way out).

Pensions are usually IHT-free so make sure you are aware of this before withdrawing any money, if you have IHT issues.

mark55man

wjr4 wrote: »

Pensions are usually IHT-free so make sure you are aware of this before withdrawing any money, if you have IHT issues.

OK thanks for that - had missed that point

carol428

sandsy wrote: »

Are you still contributing to this pension with SJP?
You need to check with SJP about the exit fees if you decide to move it.
Their exit fees seem to be different to everyone else's and aren't necessarily disapplied at 55.

Yes, I am still paying £50 per month - the minimum possible. SJP told me that the exit fees (which were very high) would reduce to zero when I reach age 55. Hence waiting until now to get shot of this pension provider.