Transfer crystallised funds to new provider ? This tax year!

ForumMember007

I may have left this too late ... help appreciated !



I have a £300k aviva stakeholder. I'd like to take my 25% lump sum and a drawdown of c.£12k this tax year, then the same drawdown in future years preferably automated eg £1k monthly, till state pension age (yes, that's me using my personal tax allowance).

From its stakeholder, Aviva only offer a manual drawdown account allowing 6 withdrawals a year, and crystallised funds can't be transferred to other Aviva product eg their SIPP; for that reason and perhaps more importantly because of my Aviva funds' declining performance according to TrustNet, I'd like to transfer my pot to other funds at another provider. However time seems tight. For example, already it seems too late to transfer to Aviva's more flexible SIPP first then take lump+drawdown, reliably before 6/4. I'm also told (by an execution only provider) that Aviva won't allow transfers to execution only providers; and that not all providers will accept crystallised funds. Aviva say that transferring my pension as is to another provider and then taking lump+drawdown should be achievable if the new provider has online processing - Aviva will set it in motion within 2 weeks of instruction.

My questions:

1) does the above make sense?

2) for the option of taking my lump+drawdown from Aviva then transferring my crystallised pot out of Aviva: is there any quicker way of finding out which providers accept crystallised pots, than phoning each in turn ? And am I likely to find my range of funds/providers too restricted to consider this route?

3) alternatively, is it realistic to expect transferring as is from Aviva to another (SIPP) provider, then taking lump+drawdown, to all be processed in the current tax year ? If I move away from Aviva I was anticipating moving to tracker funds; even so, I hadn't wanted to have to do my research and select funds in a relative rush now.

Thanks in anticipation!

Walter

dunstonh

From its stakeholder, Aviva only offer a manual drawdown account allowing 6 withdrawals a year, and crystallised funds can't be transferred to other Aviva product eg their SIPP;

Aviva's SIPP (platform) does accept crystallised funds and handles mix and match fine.

Aviva will set it in motion within 2 weeks of instruction.

Aviva internal transfers take about 3 days. Aviva transfers out to other providers using Origo options usually within 2-3 days of the request. They are one of the fast providers.

1) does the above make sense?

My perspective would be different to yours. For example, Aviva would give a platform charge of around 0.18% for a £300k transfer from an Aviva stakeholder via an IFA. However, you wouldn't likely get that direct.

2) for the option of taking my lump+drawdown from Aviva then transferring my crystallised pot out of Aviva: is there any quicker way of finding out which providers accept crystallised pots, than phoning each in turn ? And am I likely to find my range of funds/providers too restricted to consider this route?

All SIPPs and platforms should accept crystallised funds. How they handle mix and match is where the differences tend to me.

3) alternatively, is it realistic to expect transferring as is from Aviva to another (SIPP) provider, then taking lump+drawdown, to all be processed in the current tax year ? If I move away from Aviva I was anticipating moving to tracker funds; even so, I hadn't wanted to have to do my research and select funds in a relative rush now.

it doesnt really make a lot of difference which way around unless the new provider has a menu of charges that impacts on that decision. (again, differing perspective here as IFA platforms tend to have fewer charges to many of the DIY platforms. So, you will need to research that more carefully)

xylophone

I'm also told (by an execution only provider) that Aviva won't allow transfers to execution only providers;

What does Aviva say?

Have you tried HL?

https://www.hl.co.uk/pensions/transfer-to-the-vantage-sipp

AJ Bell?

https://www.youinvest.co.uk/transferring-to-us

https://moneytothemasses.com/saving-for-your-future/pensions/the-best-cheapest-sipps-low-cost-diy-pensions

ForumMember007

Thanks DunstonH and Xylophone for your helpful responses!


Updates:



a) Aviva have again told me point blank that they do not accept the transfer in of funds in drawdown, even from their own products. (So while I fully accept that on the basis of your knowledge and experience, DunstonH, what Aviva are telling me is probably wrong, I am stuck with that)

b) Aviva and three other providers have told me that an attempt to transfer my stakeholder to a SIPP then take lump and drawdown is too likely not to complete this tax year and they recommend I do not risk it And Yes that includes Aviva saying it's too late even for their own SIPP. Again, DunstonH, I'm stuck with what Aviva and the others tell me - unless I use an IFA who can help speed things through, but attempting to involve an IFA would not only cost more than the tax saving (more than one IFA has quoted me 1% on my £300k pot, and the tax saving is under £2.5k), but would - in my relatively recent albeit very limited experience - introduce sufficent delay to result in the deadline being missed anyway).
c) Aviva have told me in writing that they place no restriction on transferring crystallised pots out of Aviva - with or without IFA involvement, to execution-only providers or non-e-o-p. So that's comforting.

d) Cavendish have restated their position: yesterday they said that Aviva did not allow transfers of funds in drawdown to execution-only providers; today Cavendish say that Cavendish cannot manage funds in drawdown in their FundSupermarket product so there's no point using Cavendish so they don't accept such transfers. (Their phrasing, not mine; and maybe they'd say something different tomorrow !)

e) Hargreaves Lansdown say they will accept the transfer in of funds in drawdown.
f) Fidelity ditto.


Interim conclusion:



So on this basis it looks like the sensible approach, indeed the only available approach, is to take my lump sum plus first drawdown of this year's personal tax allowance, using Aviva's stakeholder product/process, which should safely complete this tax year; then review performance of my current Aviva funds to other Aviva funds available, and also to non-Aviva platforms (inc HL/AJB) and non-Aviva funds, reviewing charges, and if appropriate transfer my funds-in-drawdown to another provider - one which provides scheduled monthly drawdown, rather than Aviva's 6-manual-withdrawals-pa limitation, and doesn't have any other restrictions material to me. But as I understand there need be no rush; I could leave my funds in stakeholder drawdown with Aviva, taking say £2k manually every other month, for the coming year, and take my time to review options. This assumes Aviva don't impose new restrictions on transfers though!



I accept that if I had been able to pursue this a few months ago I could have used your advice, DunstonH, to convince Aviva to do for me what you say they can do; and providers' (mis)advice re timescales wouldn't have applied. Or I would have had time to find an IFA with lower charges for what is a relatively simple transaction for a client with essentially no other financial complexity.


I hadn't mentioned that I intend to continue to make the £3600pa gross non-earning maximum annual contribution, which will be relatively straightforward and flexible if I stick with Aviva, but I guess I need to check whether this is straighforward and flexible with other providers too.


Again, thanks for your help. Further comments welcome!

cfw1994

Hmmm....disturbing to hear Aviva don’t seem to know what they are doing with their own products (my main pension is in a member scheme with them, I might be in this a couple of years!) :undecided

Have you actually spoken with someone there, and if so, was it the first “level” person you got to?

I’d be inclined to call and ask for someone senior.
Have a conversation about how someone pretty experienced in the industry has told you they should easily be able to make the move, and ask what the issue is.

I’d personally tweet them first: Aviva have a solid social media team (in my experience!), and might point you in a better direction...I believe SoMe is generally a bit of nonsense, but some firms do take notice & respond well when people are gently accusing them of not knowing what they are doing

dunstonh wrote: »

My perspective would be different to yours. For example, Aviva would give a platform charge of around 0.18% for a £300k transfer from an Aviva stakeholder via an IFA. However, you wouldn't likely get that direct.

Do you mean it would cost more direct, or less?

ForumMember007

cfw1944: Yes, I have been talking by phone with various front-line Aviva personnel in their retirement departments; I didn't detect any uncertainty in their responses. I will see if I can escalate this, for once-and-for-all clarification.

dunstonh

a) Aviva have again told me point blank that they do not accept the transfer in of funds in drawdown, even from their own products. (So while I fully accept that on the basis of your knowledge and experience, DunstonH, what Aviva are telling me is probably wrong, I am stuck with that)

Aviva do have different versions of the product. Their platform pension via IFAs does do transfers in of crystallised benefits or mix and match.

Aviva do restrict what they allow DIY investors to do. So, it may be a restriction that you have but an IFA would not. That would fit with what Cavendish are saying.

Aviva is predominantly an intermediary provider. Not a DIY provider. If you are going DIY, then you really should use a provider focused on the DIY market. Not one that has a half way house offering.

ForumMember007

Thanks DunstonH. I should have made my DIY status clearer initially. Regards, W