Transferring pension funds

marinheiro

I have a very small personal personal pension pot (29k) with Aviva set up expecting me to retire early July. Obviously the annuity on that would be tiny, and I have no immediate use for the money so would prefer to leave it invested. But a) it's currently almost all in UK government bonds, and b) Aviva are currently charging me 2.8% pa to manage it (of which only 1% is the stated fee on the funds, and the rest is presumably some management charge).


So, I'm thinking of transferring it to another fund manager. Am I right to assume that if I do that, I need to take the pot as cash from Aviva incurring tax on all but the first 25%?



Thanks for any advice


Graham

Silvertabby

marinheiro wrote: »

I have a very small personal personal pension pot (29k) with Aviva set up expecting me to retire early July. Obviously the annuity on that would be tiny, and I have no immediate use for the money so would prefer to leave it invested. But a) it's currently almost all in UK government bonds, and b) Aviva are currently charging me 2.8% pa to manage it (of which only 1% is the stated fee on the funds, and the rest is presumably some management charge).

So, I'm thinking of transferring it to another fund manager. Am I right to assume that if I do that, I need to take the pot as cash from Aviva incurring tax on all but the first 25%?

Thanks for any advice

Graham

No, as long as Aviva transfer your pot directly to another legit pension fund, then you keep the tax status. You can take the 25% from your new pension and draw down the rest.

Does your Aviva pension have a GAR/other protected benefits? If so, you may need to obtain (and pay for) independant financial advice re the transfer.

marinheiro

No protected benefits I'm aware of. What kind of percentage would you expect them to charge for doing the transfer?


G.

craig1912

marinheiro wrote: »

No protected benefits I'm aware of. What kind of percentage would you expect them to charge for doing the transfer?
G.

Probably nothing depending on what type of pension you have

https://www.aviva.co.uk/frequently-asked-questions/faq/answer/4671/

xylophone

What kind of percentage would you expect them to charge for doing the transfer?

https://www.aviva.co.uk/frequently-asked-questions/faq/answer/4671/

If you are transferring to, or away from, the Aviva Pension, we won't make a charge but other providers may do so.

You would sell the gilts to cash and then request your chosen new provider to arrange the transfer.

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

dunstonh

But a) it's currently almost all in UK government bonds, and b) Aviva are currently charging me 2.8% pa to manage it (of which only 1% is the stated fee on the funds, and the rest is presumably some management charge).

Are you sure its 2.8% p.a.?

I see a lot of Aviva plans and typically the old ones are in the 0.5-1.5% range. I don't think I have ever seen an Aviva plan charge as much as that.

marinheiro

This is the bit I'm not understanding. Silvertabby said

[You pay no tax on the transfer] as long as Aviva transfer your pot directly to another legit pension fund, then you keep the tax status.

and xylophone wrote:

You would sell the gilts to cash and then request your chosen new provider to arrange the transfer.

So is this selling of the gilts to cash something I need to ask Aviva to do internally (rather than giving me the cash), followed by asking the new provider to contact Aviva with my details?



G.

marinheiro

@dunstonh: The 2.8% was a typo, I meant to write 2.28%. Aviva says the funds I'm in charge 1% p.a.; I arrived at the 2.28% by calculation (last year I paid £660.65 in charges, on a transfer value at end of year of £29,649). I rang and asked if they could explain the difference, and Aviva said they would write to me to explain. I haven't received the letter yet.


Graham

MallyGirl

marinheiro wrote: »

So is this selling of the gilts to cash something I need to ask Aviva to do internally (rather than giving me the cash), followed by asking the new provider to contact Aviva with my details?

you ask the new provider to initiate the transfer from Aviva. There are forms you sign giving them authority to communicate with Aviva for you. The choice will be 'in specie' which means the actual investments you currently hold get transferred, or 'cash' where Aviva sell the investments and just pass the cash across. In specie depends on the same funds being available via the new provider, and can be slow. With cash you are 'out of the market' for a while during the transfer.
Cash transfer for me have been done in days or a couple of weeks, the in specie I did took nearly 4 months and a lot of chasing

Albermarle

So is this selling of the gilts to cash something I need to ask Aviva to do internally (rather than giving me the cash), followed by asking the new provider to contact Aviva with my details?

You can do it this way OR you can do the following :
First choose your new provider . Apply to the new provider to have your Aviva pension transferred to them ( usually you can do this on line ). Specify that you want the transfer to be in cash . They will then ask Aviva for the transfer of your pension in cash. Aviva will convert your gilts into cash and transfer the money.
I did exactly this recently and there was no charge and the money was transferred within 48 hours - very easy .

cfw1994

marinheiro wrote: »

@dunstonh: The 2.8% was a typo, I meant to write 2.28%. Aviva says the funds I'm in charge 1% p.a.; I arrived at the 2.28% by calculation (last year I paid £660.65 in charges, on a transfer value at end of year of £29,649). I rang and asked if they could explain the difference, and Aviva said they would write to me to explain. I haven't received the letter yet.


Graham

I'm with dunstonh on this: sounds ludicrously high.
Our company uses Aviva for our pensions, and whilst I suspect we have a good 'corporate' deal (our own membersite), the fees are relatively tiny: 0.25% for most of the popular funds, the most expensive of the rest are 0.81%. No other fees I am aware of.

They can take a few days to respond to things....have they had long to reply yet?