Shopping Around for Drawdown

Moonwolf

I currently have DB pensions and a DC pot. The full details and my potential impending redundancy are on an earlier post.

My DC pot is worth about £230,000k (very volatile at the moment) and is with Standard Life. It is an old BTRSS scheme so has quite a big management charge discount.

I am currently working through drawdown strategies (take 25% tax free and invest it in S&S ISAs then draw down to my annual allowance and spend savings, redundancy etc until my DB pensions kick in or just drawdown what I need over savings).

However, looking at a Which report Standard Life have one of the worst set of drawdown charges.

Can anyone run through the basic process of shopping around for a drawdown provider and how and when one might go about moving the pot? Is professional financial advice required?

Albermarle

The first thing you need to do is check whether your SL pension even offers drawdown as older pensions usually do not . If not you will have to move it to a new pension anyway , either with SL or someone else.
If you can move it to a new SL pension AND keep the current management charge discount , then this will probably mean it has competitive charges ( although will need checking) , If you lose the discount then most likely you will find cheaper options elsewhere.

It is easy to move a standard DC pot to a new provider . You open a new account online and request they transfer your old pension. Can be as easy as that , You only really need advice if your current pot has any safeguarded benefits /guarantees.
However moving to a new provider is only the first step .You will have to decide what actual investments/funds to put the money into and depending on your level of knowledge you might benefit from advice on this .

Brynsam

If you google on the words 'finding the best drawdown provider' you will get masses of links. Try that for starters.

SonOf

I am currently working through drawdown strategies (take 25% tax free and invest it in S&S ISAs then draw down to my annual allowance and spend savings, redundancy etc until my DB pensions kick in or just drawdown what I need over savings).

Have you modelled phased flexi access drawdown in that scenario? You may find it comes out better due to the increased income you can take without creating an additional tax. It may allow you to reduce the draw on your savings and allow a greater amount of PCLS to be taken from the pension.

However, looking at a Which report Standard Life have one of the worst set of drawdown charges.

Which Standard Life are they are referring to?

Standard Life Life & pensions? (older systems, not used much nowadays for individuals)
Standard Life Wrap (a modern whole of market platform that has default platform charges but many are on bespoke terms)
Standard Life Elevate (similar to Standard Life wrap - both use FNZ software but aimed more towards IFA use - one of the cheaper platforms as it is mono charged (i.e % charge only with no add on menu of charges)

You also need to be wary of Which? Its history on financial products is not strong. It also assumes charges at the RRP. Not the real world and many financial products get different pricing to the RRP depending on the distribution method.

Is professional financial advice required?

Not if there are no safeguarded benefits.
However, it may be worth it if you do not know what you are doing. DIY and making mistakes can cost more than the cost of advice. DIY well and get it right and you can save money.

Albermarle

Which Standard Life are they are referring to?

If I remember correctly it was a comparison of SIPPS and the SL SIPP came out the most expensive .
I guess normally SL would not spring to mind as a SIPP provider and are normally not included in most of the SIPP comparison tables/articles.

To the OP - SL are better known for more traditional personal pensions rather than SIPPS, which have a different charging structure, so this Which survey is not really that relevant .
I would talk to SL about changing to a newer personal pension that offers drawdown and what the charges are . They maybe flexible ( maybe keep the current discount for example ) as they will presumably not want to lose you as a customer . Then you can see how the deal compares with others.

SonOf

If I remember correctly it was a comparison of SIPPS and the SL SIPP came out the most expensive .

Not many would use that product. It's end of life and not where the bulk of SL new business goes. Most of that would go on the SL Wrap SIPP or the SL Elevate SIPP. The SL DIY range is not great. Their main focus on adviser platforms.

I guess normally SL would not spring to mind as a SIPP provider and are normally not included in most of the SIPP comparison tables/articles.

You dont normally find intermediary options in the DIY comparison tables and vice versa. So, I suppose the context of their research needs to be taken into account.

To the OP - SL are better known for more traditional personal pensions rather than SIPPS, which have a different charging structure, so this Which survey is not really that relevant .

Perhaps that is more perception than reality. Especially for those not using intermediaries or going DIY. Both SL platforms only run SIPPs and not PPPs. They have £59.4bn on their platforms. HL, the largest DIY platform although not the largest overall has £86bn. (at the similar snapshot point). I think that would put SL about 5th overall.

Albermarle

Both SL platforms only run SIPPs and not PPPs

The part of SL that was sold to Phoenix, is still actively operating under the SL brand. If you go to the normal retail website that has not changed at all since the change in ownership ;https://www.standardlife.co.uk/c1/pensions-and-retirement/saving-for-retirement.page#wchysfr
They offer a modern PP with drawdown for new and existing customers ' Active Money Personal Pension ' . It is offered in two options - Easy with only four investments funds or DIY with about 250 insured funds.

SonOf

Albermarle wrote: »

The part of SL that was sold to Phoenix, is still actively operating under the SL brand. If you go to the normal retail website that has not changed at all since the change in ownership ;https://www.standardlife.co.uk/c1/pensions-and-retirement/saving-for-retirement.page#wchysfr
They offer a modern PP with drawdown for new and existing customers ' Active Money Personal Pension ' . It is offered in two options - Easy with only four investments funds or DIY with about 250 insured funds.

Yes. But its generally naff and a previous generation offering. You wouldnt choose to be in that if you knew what you were doing. Its aimed at people that want a brand they know but dont really know what they are doing.

Moonwolf

It is the AMPP that Standard Life would ask me to move to if I stayed with them for drawdown. They also say that depending on the funds chosen they would carry forward the fund discounts I am currently getting. There would be no transfer costs so it is purely about the choice of funds and the annual cost.

Albermarle

depending on the funds chosen they would carry forward the fund discounts I am currently getting.

That's interesting, as I also have an old SL pension with a good employer discount, and was thinking I would probably lose the discount if I was to transfer to AMPP when the time to drawdown came ( I have more than one ex and current employer pensions and SIPPs so have other options as well)
On the other hand this comment is not very encouraging ,

But its generally naff and a previous generation offering.

To be honest I find their website and customer service very good but I presume for the professionals it does not offer as many options as some others?

SonOf

To be honest I find their website and customer service very good but I presume for the professionals it does not offer as many options as some others?

Its not up to platform standard.

Many people dont need a flash website or even a website at all. So, it wont be an issue for some. Plus, their past expereience may be a provider that had no site for logging into. So, anything is better than what they had before.

The carrying over of the discounts is good as many SL pensions do have discounts. If you want a simple option and you have a good discount, then it could be good option for that person.