Recomendations

alastair_1954

Hi forum,
I will be 65 in May 2019 (i.e. 6 weeks time). My state pension date is Jan 2020 and I retired from paid employment in Nov 2018.
I have a number of personal pension plans from various providers that will mature in six weeks time and I have received communications from them querying my intentions.
My financial situation is:
Cash at bank/ short time investments - £100K approx.
Money purchase Pension plans - £200K approx
Current defined benefits pension (in payment) 12K PA
Future defined benefits pension (payable from May 2019) £5.6K PA
State pension from Jan 2020.
I would like to consolidate the maturing pension funds into a flexible drawdown scheme. I believe I have sufficient cash in the bank and a guaranteed income for life from the two defined pensions and the state pension to counter any risk of drawing down too fast. That said, I do not intend to take a tax free lump sum at this time. Is this a sensible plan? Could I improve on it?
My maturing pension pots are with Scottish Widows, Standard Life, Scottish Equitable, etc, all household names. If I was to consolidate, any thoughts on which provider to go with?
Regards ... Alastair

dunstonh

Is this a sensible plan?

Insufficient information to go on.

My maturing pension pots are with Scottish Widows, Standard Life, Scottish Equitable, etc, all household names.

AT age 65 in May, none of those pensions will be maturing.

If I was to consolidate, any thoughts on which provider to go with?

insufficient information to go on.

Unfortunately, what you have given is far too vague to be able to answer.

However, the general rule of thumb is that if you don't need the money, then leave it in the pension unless there is a justification.

alastair_1954

Hi dunstonh,
Thanks for your reply.
I understand the limitations of free general guidance via this platform when compared with a full paid for personal financial assessment with very specific advice. I would be also be very wary of posting a 'full disclosure' of my financial circumstances on a public website. Hence the dilemma of posting 'not enough information' for a full answer. That said, I don't believe I need to go down the paid for route at this stage. I would be happy with just some general advice on the pitfalls or otherwise of a flexible drawdown pension given that I have no immediate need to drawdown now and have some lifetime pensions for the longer term security.
I don't understand your comment on my pensions not maturing in May 2019. Maybe I used the wrong terminology, but all five insurance companies have contacted me numerous times to tell me I need to make some decisions on what to do with these pots once I turn 65 in May. Perhaps one option would be to do nothing and just leave the money where it currently is as you suggested. All are offering to consolidate pots from other suppliers into their own products. That would be another option, but I am also looking at other vendors e.g. Hargreaves Lansdown as being a cheaper option. Also looking for general help and free advice via this website. Is that not what MSE is all about? Saving money!
Regards ... Alastair

dunstonh

I don't understand your comment on my pensions not maturing in May 2019. Maybe I used the wrong terminology, but all five insurance companies have contacted me numerous times to tell me I need to make some decisions on what to do with these pots once I turn 65 in May.

That is because at some point in the past, they were set up with age 65 as an date to show projections to. However, that date is flexible. You can amend it (as many times as you like) to a different age. Legacy pensions (as in those that do not support drawdown) normally are required to mature by age 75).

All are offering to consolidate pots from other suppliers into their own products. That would be another option, but I am also looking at other vendors e.g. Hargreaves Lansdown as being a cheaper option.

HL is one of the most expensive platforms on the market. So, be wary when you say "cheaper option". Two of the top 10 selling funds on HL are very expensive. People buying those funds probably thought they were doing it cheaper too.

Normally, you select your investments first and then decide which is the best platform to hold it on. Not the other way around.

You also need to consider if what you already have are the best options. Deferring the date may be most suitable on one or more. It could be that all end up being better moved elsewhere once you analysis the existing pensions and compare them to modern alternatives.

Also looking for general help and free advice via this website. Is that not what MSE is all about? Saving money!

Not if you act on bad free "advice" that ends up costing you money. I, and the other advisers that post on this site, have to be more careful than most as the FCA treat social media the same as other communication methods. This is why I will so often nudge and push in areas whilst letting others who dont have that issue fill in gaps.

cloud_dog

alastair_1954 wrote: »

I would be happy with just some general advice on the pitfalls or otherwise of a flexible drawdown pension given that I have no immediate need to drawdown now and have some lifetime pensions for the longer term security.

I suppose the question comes down to are you comfortable investing / managing / drawing from the DC pot of £200k?

If not you need to consider an IFA or whether you would prefer to simply purchase an annuity (not a suggestion).

alastair_1954 wrote: »

I don't understand your comment on my pensions not maturing in May 2019. Maybe I used the wrong terminology, but all five insurance companies have contacted me numerous times to tell me I need to make some decisions on what to do with these pots once I turn 65 in May.

It is a terminology thing. Unless one or more of these pensions is invested in a endowment/assurance type fund then they will not mature, they are available to be 'accessed'.

alastair_1954 wrote: »

Perhaps one option would be to do nothing and just leave the money where it currently is as you suggested. All are offering to consolidate pots from other suppliers into their own products. That would be another option, but I am also looking at other vendors e.g. Hargreaves Lansdown as being a cheaper option.

You need to look at what these existing providers offer, i.e. flexi-draw down etc in line with your own requirements.

As mentioned, a lot comes down to how knowledgeable and comfortable you are with managing / investing your money. Would it make sense to consolidate, probably.

It is really difficult for people to offer opinions because what it right for me may not be for you. you also need to investigate charges, not only for holding your investments but also any withdrawal charges. As far as I am aware Fidelity and HL are the only two who don't charge for withdrawals but this doesn't mean they should be the only two to consider.

EDIT: Not to get stuck in the 90s but...I find SnowMan's 'Coolly comparing platform charges' spreadsheet to be 'most excellent'.

bostonerimus

Have you done a budget....how much income do you need to generate and for how long?

Albermarle

My maturing pension pots are with Scottish Widows, Standard Life, Scottish Equitable, etc, all household names. If I was to consolidate, any thoughts on which provider to go with?

One thing to be aware of is that these providers may say they offer flexi drawdown, but it is very likely that your older pension plans will not support it . So even if you stay with one of these providers you will almost certainly have to start a new scheme with them, and transfer your older pension to that .
Or you can start afresh with one of the 'newer' SIPP providers.
Basically you need to do some research on charging structures and reviews to decide the best one to go for. Virtually all the 'household names '/insurers and sipp providers have slightly different charging structures , Also nowadays you might find the 'household names' will offer a SIPP as well just to confuse things !
A SIPP is clearly a better option if you want a wider range of funds + the ability to include other types of investments in your pension/drawdown pot. For most people though this choice is not needed and a more traditional personal pension would be fine

cfw1994

alastair_1954 wrote: »

Hi forum,
I will be 65 in May 2019 (i.e. 6 weeks time). My state pension date is Jan 2020 and I retired from paid employment in Nov 2018.
I have a number of personal pension plans from various providers that will mature in six weeks time and I have received communications from them querying my intentions.
My financial situation is:
Cash at bank/ short time investments - £100K approx.
Money purchase Pension plans - £200K approx
Current defined benefits pension (in payment) 12K PA
Future defined benefits pension (payable from May 2019) £5.6K PA
State pension from Jan 2020.
I would like to consolidate the maturing pension funds into a flexible drawdown scheme. I believe I have sufficient cash in the bank and a guaranteed income for life from the two defined pensions and the state pension to counter any risk of drawing down too fast. That said, I do not intend to take a tax free lump sum at this time. Is this a sensible plan? Could I improve on it?
My maturing pension pots are with Scottish Widows, Standard Life, Scottish Equitable, etc, all household names. If I was to consolidate, any thoughts on which provider to go with?
Regards ... Alastair

As someone who is NOT an IFA (or even an FA!), & recognising you would not want to put a mass of information on a public forum like this, I would say that this is on the face of it an eminently sensible plan.

Given what you have told us, especially the part I highlighted in bold, it sounds like you already have {12k+5.6k+State} (full? you can check online!) lining up nicely, which you imply meets your needs (& sounds reasonable!).

So finding the lowest cost most flexible drawdown plan to suit you feels like a sensible plan to me, as an untrained but interested person here!

The question of who to go with is the part we may struggle to suggest....& cloud_dog probably nailed it with “are you comfortable investing / managing / drawing from the DC pot of £200k?
If not you need to consider an IFA or whether you would prefer to simply purchase an annuity (not a suggestion)”.

I would suggest building up your own comparison (spreadsheets may help!) for started by speaking with each of the companies to ask what they can offer. Ask whether there are fees to transfer in (there should not be, I don’t believe!). Ask what they offer for flexible-access drawdown and how the mechanics would work in the years ahead - tbh, that is something I am not deeply familiar with.

cloud_dog wrote: »

EDIT: Not to get stuck in the 90s but...I find SnowMan's 'Coolly comparing platform charges' spreadsheet to be 'most excellent'.

Great thread, and a useful resource!

Consolidating them is in itself very straightforward, so you “just” need to figure out which one offers you the simplest future flexi-access drawdown offering.

barnstar2077

Sipp comparison article:

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

cloud_dog

barnstar2077 wrote: »

Sipp comparison article:

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

The problem with these sites/reports is that they always assume everyone invests only using OIECs.