Move Retirement and Death Benefit Scheme

neildt

The reason I'm looking to move this pension to a SIPP is because of the low value, with the projected fund value forecast at £6490 (in 13 years time), which equates to about 3% to 4% return.

Yes, I would lose the 100% Tax-Free Cash benefit, but feel that I'm able to get a better return.

neildt

Following up on my previous post, even if I were to lose the 100% tax free lump sum payment, I’m thinking if I moved this to my SIPP and the returns averaged 8% without adding anything further the value would be nearer £20K in 20 years.

Taking 25% tax free of £20k is £5K ... so whilst value grows I’d be better off?

garmeg

neildt said:

Following up on my previous post, even if I were to lose the 100% tax free lump sum payment, I’m thinking if I moved this to my SIPP and the returns averaged 8% without adding anything further the value would be nearer £20K in 20 years.

Taking 25% tax free of £20k is £5K ... so whilst value grows I’d be better off?

How about taking the 100% tax free cash. Then reinvesting this into a SIPP and gain tax relief on the way back in?

Care with pension recycling but if you pay in £2,880 a year net (£3,600 gross) it shouldn't be a problem.

Obviously you need to wait til age 55 (57 from 2028) to go down this route. Leave it where it is until then.

neildt

If I leave it where it is now I’m going to miss out on the potential 8% growth per year though?

garmeg

neildt said:

If I leave it where it is now I’m going to miss out on the potential 8% growth per year though?

Dont they have a similar fund with similar potential?

dunstonh

neildt said:

If I leave it where it is now I’m going to miss out on the potential 8% growth per year though?

What is it growing at the moment?   
Aviva's with profits fund does have a positive return and is only !!!!!! on plans with guaranteed annuity rates, guaranteed minimum maturity values or GMP.   So, you have to take into account what you are giving up as a rate of return as well as what you may end up gaining.

neildt

The current projected value is £5850.  The valuation on 31st December 2019 was £4578.99.  I've checked and had it confirmed that there is only one investment option under this scheme, being the Traditional With-Profits fund.

Albermarle

These projections tend to be a bit pessimistic .
Also a SIPP does not return anything , it is the investments you choose within it that brings the returns ( or not) .
 8% is a long term average return from being invested 100% in global equity markets . There is absolutely no guarantee that this is what you will get over the next few years though.