Multiple Pensions - Diverse

skooldaze

Hello

I have four work pensions with only one that I regularly pay into. I've kept them separate as I Was interested in making it a lot more clean cut when it comes to retirement age. I know each one has different admin fees and performance (although not much)

My intention was to drawdown on one, take a lump sump from another etc.

If I combined them, I couldn't really do these different things could I?

dunstonh

If I combined them, I couldn't really do these different things could I?

Whether they are separate or combined, yes you can draw from them on an ad-hoc basis over a period.

If you have one under £10,000 that could be drawn as a small pots pension (doesn't trigger the annual allowance reduction). Although for most people, that wouldnt be an issue.

MK62

Actually you probably could......or at least do something very similar.
You may save on charges too, but that would depend on the schemes in question.

You would also need to check if any are Defined Benefit (DB) with a CETV over £30k or if any have safeguarded benefits (such as Guaranteed Minimum Pension (GMP)) as these will require you getting professional advice to transfer them (and transferring such pensions may or may not be a good idea anyway).

Assuming you consolidated into a single SIPP, you could withdraw tax free lump sums by crystallising enough pension to generate the desired TFLS.....eg if your SIPP was £400k, and you wanted £25k TFLS, you would crystallise £100k, taking £25k of that tax free. You'd then have two "pots" under the same SIPP, the uncrystallised pot at £300k, and the crystallised "pot" at £75k.

That said, you would need to work the numbers as some platforms charge more than others for these things (and some don't charge at all).....and with workplace pensions you may currently get a discount on the standard charges.....

Albermarle

Running four pensions during drawdown /retirement is probably creating unnecessary admin ( four tax codes for a start) and better to consolidate to one or two .
Most providers offer discounts when the pot size reaches a certain level, Usually at £50K and £250K , so combining them may give you this possibility.
As already said you need to be sure as to exactly what the charges are . Typically workplace/personal pensions tend to offer drawdown etc free ( as do the SIPP providers HL & Fidelity) but other SIPP providers usually have some charges, either annually or per withdrawal.

skooldaze

MK62 wrote: »

Actually you probably could......or at least do something very similar.
You may save on charges too, but that would depend on the schemes in question.

You would also need to check if any are Defined Benefit (DB) with a CETV over £30k or if any have safeguarded benefits (such as Guaranteed Minimum Pension (GMP)) as these will require you getting professional advice to transfer them (and transferring such pensions may or may not be a good idea anyway).

Assuming you consolidated into a single SIPP, you could withdraw tax free lump sums by crystallising enough pension to generate the desired TFLS.....eg if your SIPP was £400k, and you wanted £25k TFLS, you would crystallise £100k, taking £25k of that tax free. You'd then have two "pots" under the same SIPP, the uncrystallised pot at £300k, and the crystallised "pot" at £75k.

That said, you would need to work the numbers as some platforms charge more than others for these things (and some don't charge at all).....and with workplace pensions you may currently get a discount on the standard charges.....

Reading this blows my mind and I thought my knowledge was better than most I think i probably need to see some financial advice

beamyup

Not too complicated if you look at it this way:

1) transfer your pensions to a SIPP (e.g. AJBELL)
They will let you know if there is any reason why you cannot transfer - if that happens then you can decide what to do next. It will likely be beneficial for you NOT to transfer these.

2) Decide which funds you want to invest in inside your SIPP.
A good beginner approach would be a low cost shares/bonds fund such as Vanguard Lifestrategy.
You can choose the allocation split between bonds and stocks, e.g. the Lifestrategy 80/20 has 80% stocks and 20% bonds.
There are many other similar funds with low costs and good ability to track the market.

3) Decide your drawdown strategy.
If you want to get part of your tax free amount but not the rest you can use the example given by MK62 above.
For AJBELL they have these guides
https://www.youinvest.co.uk/pensions-and-retirement/accessing-your-pension/drawdown
and
https://www.youinvest.co.uk/sites/default/files/guide/file/AJBYI_Guide_Drawdown.pdf

Using this simple approach your charges/fees will be very low.

You need to do a bit of reading up on the above. But not too much and it will be much better value for you in the long term vs paying an IFA to do the thinking for you.