Moving Private Pension to a Drawdown

segovia

I plan to cash in my private pension in a few years time and move to an annuity or Drawdown, probably the latter of the two.

What are the pro's and cons of self-managing this process, is one drawdown provider much the same as another? I am assuming that they are all investing in similar equity-based funds.

I've been on the pensions advisory service website and they suggest it needs to be reviewed at least annually and funds swapped based on needs and performance, worst case move from one provider to another, albeit costly to do so.

Anyone has done this independently or used and IFA ?

barnstar2077

You may find this an interesting read:

https://www.moneyobserver.com/best-sipp-platforms-your-portfolio-2018#_

OldMusicGuy

segovia wrote: »

Anyone has done this independently or used and IFA ?

Many people on here manage their own DC pots in drawdown. I do, and my pot is a large one. You need to do a bit of reading to see if this is for you, books I can recommend are both by John Edwards, "DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning" and "DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing".

It's taken me around 5 years of reading, learning and experimenting to get to a point where I am confident to manage my own investments and pensions.

If you feel that learning about all of this and doing it yourself is not for you, then you should consider paying an IFA to do it for you. Make sure they are independent.

dunstonh

I plan to cash in my private pension in a few years time and move to an annuity or Drawdown, probably the latter of the two.

You wouldnt cash a pension it do do drawdown or annuity. Transfer yes, but not cashing in.

What are the pro's and cons of self-managing this process,

The recent FCA review found a number of concerns with DIY based drawdown which it did not with advised. Like anything you do DIY on, if you DIY well, you can save money. If you DIY badly it can be a costly mistake.

is one drawdown provider much the same as another?

No. Charges vary. investment choice, features, options, prefunding or not prefunding withdrawals, using BACs or CHAPs, paperless or paper. etc.

I am assuming that they are all investing in similar equity-based funds.

Many modern options are whole of market. So, have access to 30,000 odd investment options.

I've been on the pensions advisory service website and they suggest it needs to be reviewed at least annually and funds swapped based on needs and performance, worst case move from one provider to another, albeit costly to do so.

You should ideally review your investments annually and your draw rate. Especially if you have a high draw rate. Rebalancing portfolios is normally annual.

Anyone has done this independently or used and IFA ?

You have pretty much covered 80% of the people there (with around 20% using FAs/tied agents - not a desirable option).

tacpot12

I would echo OldMusicGuy's comments; I manage my own DC pot in drawdown, it is my primary pension provision, I have two small DB pensions that kick in at age 62 & 65, and my state pension entitlement at age 67.

It has taken me about three years to get ready to manage a drawdown pension, and I have been learning about investing for 20 years as a result of acquiring a personal pension in 1989 via my employer.

I am reviewing my investments every half year, and adjust the drawdown rate on an annual basis.

Buying an annuity removes all the need to manage your pension, but the reduction in income for people who are young and healthy is too large for me to stomach.

Thrugelmir

Can you afford to lose money? Or to ask the question in another way. Do you have a secure guaranteed base income? Drawdown needs to be considered as part of an overall strategy. Not in the expectation that there's going to be automatically a better return by doing so.

segovia

Thrugelmir wrote: »

Can you afford to lose money? Or to ask the question in another way. Do you have a secure guaranteed base income? Drawdown needs to be considered as part of an overall strategy. Not in the expectation that there's going to be automatically a better return by doing so.

I/we have other sources of income from property rentals and a DB scheme of my Wife's assuming that we don't decide to transfer it. We also have significant equity in our home which is already far too big for us.

I don't like losing money and I don't like giving it away either. The decision I have to make is,do I give an IFA £6,000.00 or do it myself ?

barnstar2077

segovia wrote: »

I/we have other sources of income from property rentals and a DB scheme of my Wife's assuming that we don't decide to transfer it. We also have significant equity in our home which is already far too big for us.

I don't like losing money and I don't like giving it away either. The decision I have to make is,do I give an IFA £6,000.00 or do it myself ?

Only you can answer that question. Are you the sort of person who will find it interesting to learn about investing? Personally I am glad I started to learn about pensions and investing, it has become a sort of hobby for me really. I am always tweaking my spreadsheets!

segovia

barnstar2077 wrote: »

Only you can answer that question. Are you the sort of person who will find it interesting to learn about investing? Personally I am glad I started to learn about pensions and investing, it has become a sort of hobby for me really. I am always tweaking my spreadsheets!

When it comes to saving money I am prepared to put the effort in and I have two or three years to learn what I need to know.

BLB53

About 10 yrs back I consolidated my various pensions from previous employers into a SIPP with AJ Bell and later converted this to drawdown when I moved to early retirement and required an income.

I DIY drawdown strategy via a SIPP can be relatively straight forward and cost effective depending on your level of knowledge about investing and experience.

As you have some time, as recommended by OldMusicGuy, read up on this and see if you think its for you. If not you may need to consult an IFA which can be costly or you could consider an annuity but they have not been such good value for at least the past 10 years.

Thrugelmir

segovia wrote: »

When it comes to saving money I am prepared to put the effort in and I have two or three years to learn what I need to know.

Investing isn't the same as saving. There's no off the shelf course to learn from. The one certainty is that you'll never stop gaining experience. That's something you cannot buy.