To transfer to Pru or to sit tight?

xylophone

At £24,000 this is a modest pension pot - had you considered opening a SIPP with Hargreaves Lansdown?
The SIPP would be free to open and if you preferred to hold in cash, there would be no administration charge - there would even be a tiny amount of interest. Otherwise, the charge would be 0.45% - not too significant on the sum involved.

Taking the PCLS and flexible drawdowns is also free.

You might even want to consider continuing to contribute -  you would receive tax relief which, if you stayed in cash you could regard as "interest" - and certainly at a higher rate than you would get on any savings account.

Another thought, would contributing to a pension garner a higher rate of tax credit?

Carefulspender1

xylophone said:

At £24,000 this is a modest pension pot - had you considered opening a SIPP with Hargreaves Lansdown?
The SIPP would be free to open and if you preferred to hold in cash, there would be no administration charge - there would even be a tiny amount of interest. Otherwise, the charge would be 0.45% - not too significant on the sum involved.

Taking the PCLS and flexible drawdowns is also free.

You might even want to consider continuing to contribute -  you would receive tax relief which, if you stayed in cash you could regard as "interest" - and certainly at a higher rate than you would get on any savings account.

Another thought, would contributing to a pension garner a higher rate of tax credit?

Thank you xylophone for your suggestion - apologies for the delay in getting back to you, my focus went elsewhere the past week - but I have had a look at Hargreaves Lansdown and it certainly is an option. My hesitation now is what has happened to the markets over the Corona virus - I know that markets recover but if it's a case of years then is it worth me moving the little pot that I have?  I had a look at Hargreaves Lansdown shares the other day and they had taken a much bigger hit than the Pru and even today they are still falling where others have recovered a little.  Is this an indicator of an issue - or is it that I am just concerned after my experience with Equitable! 
My other option I was considering was to take the Utmost pot over the next 2 or 3 of years in 3 lump sums to avoid tax and put it into a fixed savings account - I know interest rates are low but as I'm unlikely to make much on the pot in another scheme maybe this is an option. (I am a therapist and I foresee my income dropping even further as a knock on effect of Corona virus - I may have to stop working for a period of time) I would appreciate your thoughts on the pros and cons of taking the "leave it where it is and take the lump sums avoiding tax" option.

dunstonh

 or is it that I am just concerned after my experience with Equitable! 
Equitable failed because it put in place guaranteed annuity rates that it could not afford to pay.   The last provider of guaranteed annuity rates withdrew them for new business in 1995.    SIPPs do not have guaranteed annuity rates and cannot suffer the same fate for that reason.

My other option I was considering was to take the Utmost pot over the next 2 or 3 of years in 3 lump sums to avoid tax and put it into a fixed savings account 
Taking money out of a pension to put in a savings account is rarely a good idea unless it is going to be spent in the very near future.

 I know interest rates are low but as I'm unlikely to make much on the pot in another scheme maybe this is an option
You will make even less in the savings account.   The rate of return on investments is the same whether you have £10, £1000 or £100,000 etc. The monetary value will of course be different but if the value is low in a pension, it will be low in a savings account.

Albermarle

If you set up a SIPP with Hargreaves Landsdown ( or others) they only act as a platform/administrator of the pension . Your money is held  within the pension ( either in investments funds or cash ) . Your money is not invested in Hargreaves Landsdown itself, so it's share price movement is irrelevant .

xylophone

 I had a look at Hargreaves Lansdown shares the other day and they had taken a much bigger hit than the Pru 

I think you have misunderstood - I was not suggesting investing in Hargreaves Lansdown shares but in using the HL SIPP. Of course a person might choose to buy HL shares within the SIPP just as he might choose to buy BP or Glaxo or Unilever etc.

You indicated that you might wish to draw down the £24,000 over the next three years - you could hold cash within the HL SIPP as I explained above, or you might choose to invest in funds.

Carefulspender1

dunstonh said:

 or is it that I am just concerned after my experience with Equitable! 
Equitable failed because it put in place guaranteed annuity rates that it could not afford to pay.   The last provider of guaranteed annuity rates withdrew them for new business in 1995.    SIPPs do not have guaranteed annuity rates and cannot suffer the same fate for that reason.

My other option I was considering was to take the Utmost pot over the next 2 or 3 of years in 3 lump sums to avoid tax and put it into a fixed savings account 
Taking money out of a pension to put in a savings account is rarely a good idea unless it is going to be spent in the very near future.

 I know interest rates are low but as I'm unlikely to make much on the pot in another scheme maybe this is an option
You will make even less in the savings account.   The rate of return on investments is the same whether you have £10, £1000 or £100,000 etc. The monetary value will of course be different but if the value is low in a pension, it will be low in a savings account.

Thank you for clearing that up for me - I wondered if you could explain to me the Cash fund, which I understand is the safest one to put payments into - I've been searching the HL site  under the term "cash fund" but perhaps I'm looking for the wrong thing?

Carefulspender1

Albermarle said:

If you set up a SIPP with Hargreaves Landsdown ( or others) they only act as a platform/administrator of the pension . Your money is held  within the pension ( either in investments funds or cash ) . Your money is not invested in Hargreaves Landsdown itself, so it's share price movement is irrelevant .

Ahhh, that makes sense, thanks Albermarle.

Albermarle

When you contribute a one off lump sum to a SIPP with HL ( or another SIPP provider) your money sits in your SIPP account as cash.
Normally you would then buy investments with the cash , but you don't have to , you can just leave it as cash . Normally cash held within a SIPP , pays zero /very little interest, so although it is safe , it will lose value to inflation over time.

Carefulspender1

Right now I understand - thank you for your explanations Albermarle, it's much appreciated.