Best platform for Sipp?

Durban

My husband has an old stakeholder with profits pension with Aviva from an old employer. It is now worth £69,000 and we are adding to it in order to take advantage of the basic rate tax relief in order to take the 25 percent and pay off the balance of our mortgage..Next year , it should be worth around £98,000 give or take,

Next year , we would like to take the 25% lump sum and pay off our mortgage and then leave the rest invested until his retirement age at 67.

However , this particular stakeholder pension is old and does not allow for the 25% withdrawal so we will have to transfer it.

My question is, what is the best , cost effective platform to transfer it to? We just want to take 25 % , no more , leave rest invested probably into VLS 80/20. We would not wish to draw anything more from this for the next 12 years.

He also will also have a small DB pension and is paying into his new DC work pension now. I have a good LGPS pension , plus AVC's and we have a BTL so we are happy with the old Aviva pension being a higher risk fund.

Many thanks

xylophone

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

Albermarle

As you will from the link in the previous post , the charging structure of each SIPP is a bit different and what would be cheaper for one person , may not be for another.
Here is another link that could be useful :
http://www.comparefundplatforms.com/

If a platform you like does not have VLS 80 available they will have something very similar i.e. a 80% equity multi asset fund with similar charges - normally around 0.22%/0.25%

Durban

Thank you

Would the pension be considered in drawdown if just the 25% was taken? I see that some providers have differing charges for drawdown.
We would not want to take anymore out than the 25%

When transferring , would we take the lump sum from the new SIPP provider after everything has been transferred and do they charge for taking the 25% ?

Thanks again

Albermarle

Would the pension be considered in drawdown if just the 25% was taken? I see that some providers have differing charges for drawdown.

Yes the pension would be in drawdown and ( from a previous thread I remember ) some providers will charge you annually even if you make no withdrawals. Others might make a one off charge but then only charge for actual withdrawals .
Two providers have an all in drawdown/SIPP charge and only charge the platform service fee ( HL and Fidelity ) but of course their platform fees are higher than the others ( HL more than Fidelity )
I am afraid you will have to study the small print of the charging structures carefully .

Albermarle

When transferring , would we take the lump sum from the new SIPP provider after everything has been transferred and do they charge for taking the 25% ?

Yes to the first question and for the second question , some do and some don't , but will be only a one off fee so not that important.

xylophone

Would the pension be considered in drawdown if just the 25% was taken? I see that some providers have differing charges for drawdown.

To take the PCLS, the pension is moved into flexi access drawdown but this does not mean that you have to access the balance which can remain invested as you choose.

Indeed, some people make the decision not to take anything over the PCLS because they wish to continue to contribute to a DC Pension in excess of the amount permitted by the MPAA.

https://www.moneyadviceservice.org.uk/en/articles/money-purchase-annual-allowance

Would the provider of the stakeholder permit your husband to take the PCLS and transfer the balance to his current workplace pension (assuming it would accept a transfer in)?

This might be an alternative to opening a SIPP and might suit on the basis that your husband does not wish to access the balance until he reaches his late sixties.

If he does choose the SIPP option, using HL by way of example, there would be no charge to take the PCLS and fund purchases would be free.

The later drawdown of the balance would be free.

However, there would be an ongoing 0.45% management charge on top of the charge made by the fund provider.

Other providers have a lower management charge but charge for fund purchases and for drawing down the balance.

It is a question of working out what suits you best.

Of course, by the time you need to make a decision, Vanguard may have brought out their long promised SIPP....

Below may be of interest

https://moneytothemasses.com/saving-for-your-future/pensions/when-is-vanguard-sipp-launch-date-available-cheaper-alternatives

Durban

xylophone wrote: »

Would the provider of the stakeholder permit your husband to take the PCLS and transfer the balance to his current workplace pension (assuming it would accept a transfer in)?

This would be an excellent idea and yes, the current workplace pension scheme definitely allows a transfer in although the Aviva stakeholder is so old that they say that the frame apparently only allows so many payments in before it crashes, so I am not sure whether it will allow him to take out 25%.

We will look into this as this really would suit us very well - thank you

Albermarle

This would be an excellent idea and yes, the current workplace pension scheme definitely allows a transfer in

Although most schemes are happy for transfers in of uncrystallised funds ( before the 25% TFLS is taken) , you need to check if they are happy to take a transfer of crystallised funds ( after the 25% has been taken) as they may not like this.
Also compare the charges for this scheme with the SIPPS before making any decision.

jsinc

Which? have a drawdown comparison table and info (need to check they offer VLS 80/20 and specifics if not making withdrawals):
https://www.which.co.uk/money/pensions-and-retirement/options-for-cashing-in-your-pensions/income-drawdown/compare-pension-drawdown-plans-and-charges-ax1628r13rdk

Would also double check the terms of your with-profits scheme if transferring, and compare costs with any flexible Aviva/other non-SIPPS option that can offer what you want.

Durban

Thank you

I have now had a look at the Aviva pension ( not my husband's old Stakeholder one ). The charges are 0.4% on the first £50,000 and 0.35% on anything after.

There do not appear to be any drawdown charges.
It may be worth transferring to the Aviva pension but I will do some more research.