Taking drawdown with lowest fees

matty6962

Hi everyone 
I am due to take my private pension with prudential. I’ve decided I want to do a drawdown and take my money out ASAP within 2 years allowing for the tax years. Every financial advisor I talk to wants at least 1.5% of my pot plus other charges. Does anyone know if there is a cheaper way to do a drawdown. 

Ty 

JoeCrystal

Why do you need a financial advisor to do this? Surely it is a matter of transferring it to SIPP that allows the drawdown unless there is something unusual about the original pension plan?

Albermarle

As above . Fidelity and Hargreaves Landsdown have no extra charges for Drawdown . The other SIPPS do but they are not excessive.
Or you could transfer to one of the other traditional names, like Standard Life or Aviva.
One caveat is I know Fidelity have some rules about new customers starting drawdown immediately as they are trying to avoid short term customers ( like you would be ) Maybe others will do the same. 
In all the above cases you do not need a financial advisor .10/15 minutes on the internet is enough usually.

dunstonh

 Every financial advisor I talk to wants at least 1.5% of my pot plus other charges. 

How much do you think you should be paying them?  Other charges will exist with all providers and investments.  Just as your existing plan has charges.

It is actually quite possible that the charges will be lower than the existing Pru plan when you move to a modern fee based plan rather than a legacy commission based one.

Does anyone know if there is a cheaper way to do a drawdown. 

Do it yourself (as long as you DIY well - if you dont then DIY can actually be more expensive in respect of annual costs and poor quality investing.  Lots of DIY investors end up going with an expensive platform like HL and using their own brand funds which cost more than a typical IFA investment spread giving you greater bottom line costs)

zagfles

dunstonh said:

 Every financial advisor I talk to wants at least 1.5% of my pot plus other charges. 

How much do you think you should be paying them?  Other charges will exist with all providers and investments.  Just as your existing plan has charges.

It is actually quite possible that the charges will be lower than the existing Pru plan when you move to a modern fee based plan rather than a legacy commission based one.

Does anyone know if there is a cheaper way to do a drawdown. 

Do it yourself (as long as you DIY well - if you dont then DIY can actually be more expensive in respect of annual costs and poor quality investing.  Lots of DIY investors end up going with an expensive platform like HL and using their own brand funds which cost more than a typical IFA investment spread giving you greater bottom line costs)

Not again!! For something like the OP wants to do - transfer and drawdown over 2 years, HL are likely to be one of the cheapest platforms, because they don't have specific drawdown fees, or flat fees, and for 2 years it's hardly worth investing in funds. If OP kept it in cash, the fees from HL would be precisely zero. (effectively - loss of interest on the money, but look at interest rates now).

If the OP used funds, the HL charge would be around 0.2% more than the average platform, so 0.4% over 2 years, compare that with IFA charge quoted of 1.5% and/or drawdown charges with other providers.

zagfles

matty6962 said:

Hi everyone 
I am due to take my private pension with prudential. I’ve decided I want to do a drawdown and take my money out ASAP within 2 years allowing for the tax years. Every financial advisor I talk to wants at least 1.5% of my pot plus other charges. Does anyone know if there is a cheaper way to do a drawdown. 

Ty 

Loads of providers will do it much cheaper - google "snowman's spreadsheet", it'll depend what you invest it in, but there is no requirement to pay 1.5% to any IFA. Assuming it's a normal DC pension with no guarantees etc (eg guaranteed annuity rate)

ElephantBoy57

matty6962 said:

Hi everyone 
I am due to take my private pension with prudential. I’ve decided I want to do a drawdown and take my money out ASAP within 2 years allowing for the tax years. Every financial advisor I talk to wants at least 1.5% of my pot plus other charges. Does anyone know if there is a cheaper way to do a drawdown. 

Ty 

I cashed in my Prudential pension and had to pay fees. At the time I didn't think I had a choice.

dunstonh

ElephantBoy57 said:

matty6962 said:

Hi everyone 
I am due to take my private pension with prudential. I’ve decided I want to do a drawdown and take my money out ASAP within 2 years allowing for the tax years. Every financial advisor I talk to wants at least 1.5% of my pot plus other charges. Does anyone know if there is a cheaper way to do a drawdown. 

Ty 

I cashed in my Prudential pension and had to pay fees. At the time I didn't think I had a choice.

If you used the Pru advice service then you pay for advice.   If you just filled in the forms to use UFPLS then it would not cost.

green_man

How big is this pot?     If trying to drawdown over two years then I assume it’s not huge (otherwise a longer drawdown period would be preferable for tax reasons). In that case something like HL would be pretty competitive, just be aware (like most SIPPs) you will need to keep it open for over 12 months to avoid larger closer costs.

[Deleted User]

Be careful with HL though, check the small print, if you have one pot crystallised and one pot not, you pay double the holding fees.
I use HL but only for Investment Trusts (max £200 a year fee in a SIPP)

garmeg

Deleted_User said:

Be careful with HL though, check the small print, if you have one pot crystallised and one pot not, you pay double the holding fees.
I use HL but only for Investment Trusts (max £200 a year fee in a SIPP)

I understand what you are trying to say, but it isn't really double fees. The two pots are treated as separate accounts with their own charges.

If your fees for both accounts are capped due to holding at least £44,444.44 worth of shares and ITs (no funds) in each pot then each account will cost £200.

I prefer HL's approach of two pots against AJ Bell's one pot and behind the scenes split. With the former you can have a separate investment philosophy for each pot whereas with the latter this is not so simple.