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Moving Private Pension to a Drawdown
Comments
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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.
We have two personal pensions, I have no plans to transfer either into a SIPP unless there is a benefit in doing so? I am assuming I'll be going straight into a drawdown agreement.0 -
We have two personal pensions, I have no plans to transfer either into a SIPP unless there is a benefit in doing so? I am assuming I'll be going straight into a drawdown agreement.
A basic SIPP is a personal pension nowadays. Not all pension schemes support drawdown, particularly if they are older schemes so worth checking that yours do.
Even if they do it's worth comparing costs against alternatives anyway.0 -
We have two personal pensions, I have no plans to transfer either into a SIPP unless there is a benefit in doing so? I am assuming I'll be going straight into a drawdown agreement.
Nowadays, it would be unusual to use a drawdown plan. You would normally use a SIPP or a personal pension with drawdown functionality coded into it. Modern pensions are more software than product.
Pension products are a bit like many retail products. You may buy them when they are version 1 and the best but then comes version 2, 3, 4.... and years later your pension plan resembles their retail equivalent of an Iphone 1.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.0 -
A basic SIPP is a personal pension nowadays. Not all pension schemes support drawdown, particularly if they are older schemes so worth checking that yours do.
Even if they do it's worth comparing costs against alternatives anyway.
One of my pensions is a very old personal pension Series 920 and the other is an Aviva Personal Pension. As far as I am aware neither have a drawdown capability, only by transfer.0 -
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 ?
Based on your comments and lack of knowledge, I'd say you need an IFA. How much money are we talking about here? Under £100k you will pretty much have to self manage as its not really financially viable to pay an IFA.0 -
AnotherJoe wrote: »Based on your comments and lack of knowledge, I'd say you need an IFA. How much money are we talking about here? Under £100k you will pretty much have to self manage as its not really financially viable to pay an IFA.
Two pots, 300K + 100K.
I'mm in no hurry and I have the time to investigate all options and that includes an IFA option. However, my past experience with IFA's has not been very good and I can't wait indefinitely until I find one I can trust, so DIY is looking increasingly viable.
J0 -
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.
I think that it may well be worth having a chat with an IFA. It is as dunstonh says something that you either do well or not. Only you can decide if you have the confidence to go it alone after researching or not.
After researching and asking questions here I am certain that I would be comfortable self managing for myself, however if I go first my wife would not be that confident, having chatted with an IFA, we're still accumulating and we're going to be advised, certainly in the medium term.
Would your partner (if there is one) be willing to take over self management if you die? Would you lose sleep if the markets went all over the place?
Just because I have a set of spanners and a jack, it doesn't make me a mechanic is the comparison my wife gave me!CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!0 -
I think that it may well be worth having a chat with an IFA. It is as dunstonh says something that you either do well or not. Only you can decide if you have the confidence to go it alone after researching or not.
After researching and asking questions here I am certain that I would be comfortable self managing for myself, however if I go first my wife would not be that confident, having chatted with an IFA, we're still accumulating and we're going to be advised, certainly in the medium term.
Would your partner (if there is one) be willing to take over self management if you die? Would you lose sleep if the markets went all over the place?
Just because I have a set of spanners and a jack, it doesn't make me a mechanic is the comparison my wife gave me!
If all goes well I'll have nothing left by the time I die (;-)
I am not eliminating an IFA, it's just that we have trodden that path before and not been very comfortable with the recommendations and the fees being quoted. In fact, most said our pension arrangements are solid, but not great and suggested that if we wanted a higher return we could transfer into Joe Bloggs Fund recommended by them for fees in the region of £10,000.00. So when I asked would I get my £10,000.00 fees back or more, hey said there are no guarantees. Needless to say, we stayed put.0 -
If that's your mindset, then DIY is potentially the way to go. Spend time looking through useful threads on MSE and go to the Monevator website. Also start with those books I mentioned, you will find them a good starting point.I am not eliminating an IFA, it's just that we have trodden that path before and not been very comfortable with the recommendations and the fees being quoted. In fact, most said our pension arrangements are solid, but not great and suggested that if we wanted a higher return we could transfer into Joe Bloggs Fund recommended by them for fees in the region of £10,000.00. So when I asked would I get my £10,000.00 fees back or more, hey said there are no guarantees. Needless to say, we stayed put.0 -
OldMusicGuy wrote: »If that's your mindset, then DIY is potentially the way to go. Spend time looking through useful threads on MSE and go to the Monevator website. Also start with those books I mentioned, you will find them a good starting point.
Books are already on order from Amazon, thanks.0
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