Small pension pot options

Aylesbury_Duck

I'm in my late forties and now have a collection of pensions from previous employments.  I'm now in the LGPS but I have two large sums with Aviva and Scottish Widows, a growing AVC with Prudential (linked to the LGPS) and one small private pension with Sun Life.  The Sun Life was a one-off deposit of £1800 back in 1999 and it's now worth about £6300.   I haven't touched it in all that time and don't intend to add to it.

What are my options for this small sum?  From 55 I understand I could take 25% of it tax free and the rest can buy a tiny annual pension.  For the sake of tidiness, is it simple to transfer it into, say, my Aviva plan?  Presumably the benefit of leaving it where it is is that I can access it independently of my other plans, earlier perhaps, but it's such a small sum in the context of my other plans that it's not really going to make a difference to my retirement planning.

xylophone

If under £10,000, it would be possible to take it as a small pot - 25% tax free, the balance taxed as income in year of receipt.
https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Quick_SPOT012_V1.7.pdf

Albermarle

probably as it is an older scheme , your only options are 25% tax free and then an annuity ( or take it it is as cash/small pot)
Your other pensions will probably offer a drawdown facility , so you could access that facility by transferring it to one of them , if you wanted to 

jamesd

Check the Sun Life plan for a guaranteed annuity value.

83705628

Yes, but unless there are other benefits or strings attached to the DC pensions you are guaranteed to lose money to the extortionate costs Aviva, Scottish Widows and Sun Life charge vs transferring to a Vanguard SIPP and sticking the lot in, for example, a Target Retirement Fund.

wjr4

tcallaghan93 said:

Yes, but unless there are other benefits or strings attached to the DC pensions you are guaranteed to lose money to the extortionate costs Aviva, Scottish Widows and Sun Life charge vs transferring to a Vanguard SIPP and sticking the lot in, for example, a Target Retirement Fund.

Where exactly did you find the evidence to back this up? 

wjr4

1) check for guaranteed annuity rates, or protected tax free cash, or any other benefits 
2) I would not be worrying about the rules now which will most likely change int eh (just under) 15 years before you reach the minimum pension age (which may also change in that time). 

83705628

wjr4 said:

tcallaghan93 said:

Yes, but unless there are other benefits or strings attached to the DC pensions you are guaranteed to lose money to the extortionate costs Aviva, Scottish Widows and Sun Life charge vs transferring to a Vanguard SIPP and sticking the lot in, for example, a Target Retirement Fund.

Where exactly did you find the evidence to back this up? 

https://www.vanguardinvestor.co.uk/content/documents/legal/vanguard-full-fund-costs-and-charges.pdf
Plus none of those providers make their charges easy to find let alone understand. Scottish Widows claim theirs in 0.5%, Aviva's platform fee starts at 0.4% and many of their funds could easily take the total over 1%, Sun Life charges start at 0.55%, many are much higher, and none of them make it easy to find transaction costs or all the other little fees they add on. And there's a chance your accounts could be in active funds, or overweight on high-yield bonds or emerging markets.

jamesd

tcallaghan93 said:

https://www.vanguardinvestor.co.uk/content/documents/legal/vanguard-full-fund-costs-and-charges.pdf

Looks somewhat expensive compared to the 0.277% with no platform charge that I'm paying for SL Vanguard FTSE Developed World Hedged Pension Fd in a Standard Life scheme. While Vanguard don't seem to offer it at all.  IE00B76VTN11 Vanguard ESG Developed World All Cap Equity Index Fund - GBP Acc looks closest but at 0.39%. My scheme has a 0.75% discount.

tcallaghan93 said:

none of those providers make their charges easy to find let alone understand. Scottish Widows claim theirs in 0.5%, Aviva's platform fee starts at 0.4% and many of their funds could easily take the total over 1%, Sun Life charges start at 0.55%, many are much higher, and none of them make it easy to find transaction costs or all the other little fees they add on. And there's a chance your accounts could be in active funds, or overweight on high-yield bonds or emerging markets.

You don't even know that those are the products Aylesbury_Duck is in, let alone whether there's a plan discount like mine.

Up to Aylesbury_Duck to be in "active funds", like the Target Retirement Fund you mentioned, "or overweight on high-yield bonds or emerging markets" if desired.

What we do know, because Aylesbury_Duck told us the relevant numbers, is that the annualised return at Sun Life has been 6.46% after all charges over 20 years and that's entirely reasonable and suggests that for that product you're just scaremongering. It's been doing well enough that there might be no point in changing.

Albermarle

tcallaghan93 said:

wjr4 said:

tcallaghan93 said:

Yes, but unless there are other benefits or strings attached to the DC pensions you are guaranteed to lose money to the extortionate costs Aviva, Scottish Widows and Sun Life charge vs transferring to a Vanguard SIPP and sticking the lot in, for example, a Target Retirement Fund.

Where exactly did you find the evidence to back this up? 

https://www.vanguardinvestor.co.uk/content/documents/legal/vanguard-full-fund-costs-and-charges.pdf
Plus none of those providers make their charges easy to find let alone understand. Scottish Widows claim theirs in 0.5%, Aviva's platform fee starts at 0.4% and many of their funds could easily take the total over 1%, Sun Life charges start at 0.55%, many are much higher, and none of them make it easy to find transaction costs or all the other little fees they add on. And there's a chance your accounts could be in active funds, or overweight on high-yield bonds or emerging markets.

My workplace pension with SW ( ex Zurich & with a large employer) has a platform charge of 0.17% and the passive Multi asset fund costs 0.095%. 

83705628

My workplace pension with SW ( ex Zurich & with a large employer) has a platform charge of 0.17% and the passive Multi asset fund costs 0.095%. 

That may not be all actual or potential costs.
Also I'm biased because I just prefer the Vanguard website and service and the fact that they don't have external shareholders.