SIPP or drawdown SIPP

ProDave

We are looking to transfer a small DC pension my wife has currently with Aviva.  I did much the same thing with my own small DC pension a few years ago but wanted to check the procedures:

I intend to transfer it to HL (where mine is)

When I transferred mine, I transferred it before I was 55 into a SIPP, and then when I reached 55 moved it into a drawdown SIPP.  As my wife is already 55 can it go straight into a drawdown SIPP on transfer or does it still have to go into a SIPP first?

Before I transferred mine, I contacted Aviva and instructed them to transfer all the investments into cash ready for the transfer. That proved an awkward process.  Can I skip that stage and just instruct HL to transfer the pension in, and would the selling of funds happen automatically?

wjr4

A SIPP moves into drawdown when you take any money from it. There is not a ‘drawdown SIPP’ 

Albermarle

Regarding your second point , just instigate the transfer with HL  . You do not need to contact Aviva at all . I transferred an Aviva pension to another SIPP provider and the cash arrived in 48 hours ( unusually quick but it shows what is possible)
For the first question, there are not really two distinct entities of SIPP and drawdown SIPP. So your wife will transfer into the SIPP and then start to drawdown from the same SIPP .

squirrelpie

Note that HL sometimes have offers for people transferring pensions into their SIPP, like this (expired) cashback https://www.hl.co.uk/investment-services/vantage-service/transferring-your-existing-investments/cash-back-offer-extension

So it might be worth asking them what they can offer or waiting until they have some offer running.

ProDave

wjr4 said:

A SIPP moves into drawdown when you take any money from it. There is not a ‘drawdown SIPP’ 

I only asked that because my HL account shows I have two "accounts"

A "SIPP" now with £0 in it

A "Drawdown SIPP" where all the funds are now and from which I can draw when I want to.

One last question, my wife is still paying into a company pension.  Can she draw the tax free 25% from this SIPP without affecting that?

Linton

ProDave said:

wjr4 said:

A SIPP moves into drawdown when you take any money from it. There is not a ‘drawdown SIPP’ 

1)I only asked that because my HL account shows I have two "accounts"

A "SIPP" now with £0 in it

A "Drawdown SIPP" where all the funds are now and from which I can draw when I want to.

2) One last question, my wife is still paying into a company pension.  Can she draw the tax free 25% from this SIPP without affecting that?

1) I believe that with HL if you take a tax free lump sum from a SIPP the remaining "crystalised" 75% is called a "drawdown SIPP".   So your wife just moves her money anto an HL SIPP and then draws down the TFLS when/if she wishes.  Different platforms handle crystalised funds in different ways.

2)  As long as your wife only draws down the tax free lump sum it wont affect her employer pension.  If she draws down 1p above this her annual tax allowance which includes employer contributions, drops to £4K.

Albermarle

Can she draw the tax free 25% from this SIPP without affecting that?

Just to change the topic slightly . Normally the guidance is not to take all ( or any ) of the 25% tax free cash out of the pension unless you actually need it for something . If you do not need it then in most circumstances it is best left in the pension.