Moving out of SIPP before retirement - possible?

Catapult

I have a SIPP with HL. Vast majority of the time, the money in there is just held as cash as 1. times are so uncertain that any investment in shares / ETFs / funds is so high risk at the moment and 2. I don't really have the acumen to invest my pension sensibly or the money to spend on financial advice. So my question is - can I move my SIPP into an ISA / Savings Plan / Other now i.e. about 10 years before I hit retirement age? Answer has been 'no' for a long time, but perhaps rules have been relaxed in recent times? Doesn't have to be into a tax-efficient wrapper necessarily.

molerat

What does "retirement age" mean - different meanings to different people ? You can do whatever you wish once you reach 55. before then you have to keep within a pension wrapper.

Albermarle

You can not take any money out of a SIPP until you are 55. 

 Vast majority of the time, the money in there is just held as cash as 1. times are so uncertain that any investment in shares / ETFs / funds is so high risk at the moment a

Investment is no more high risk today than at any other time . Most losses due to Covid have been largely recovered. However leaving money in cash in a SIPP means a guaranteed loss due to inflation. You should really thing again about your strategy which could leave you with significant losses over the coming years.

Catapult

Understood. Just a thought - is there cover for cash held in a SIPP should the provider go under?

Albermarle

Normally SIPP cash is kept in a seperate bank account and these accounts are covered in the same way your personal bank account is - for £85K. I think HL distribute the cash between different banks - the details are on their website somewhere.

barnstar2077

The age you can access your private pension is set to rise in 2028 to 57.

Unfortunately I do not think you will be able to access your money until then.

I think you are taking more of a risk by leaving your money in cash than you would be picking a low to medium risk global fund to put it in.  If you were retiring in a couple of years fair enough, but over ten plus years that is a massive loss to inflation.

dunstonh

1. times are so uncertain that any investment in shares / ETFs / funds is so high risk at the moment

There are never certain times.   Funds are not necessarily high risk.  They are a sliding scale of risk.

2. I don't really have the acumen to invest my pension sensibly or the money to spend on financial advice.

It shows if you are in cash.  Most people are better off just remaining invested through periods of negativity.  

So my question is - can I move my SIPP into an ISA / Savings Plan / Other now i.e. about 10 years before I hit retirement age?

Its a dreadful idea but you can do it if you are 55.

You say you cannot afford advice but the problem is that your current thinking suggests you cannot afford not to take advice as you are heading towards bad decision making.   You are around 10 years away from your retirement age (if we interpret what you are saying correctly).  you will probably live for another 30 odd years.  So, that is 40 years you need the pension money (in whatever form).   That is about 4 economic cycles.  Going to cash would be extremely costly and a higher risk than remaining sensibly invested.

LHW99

Also if you take any taxed money out once you are 55, then you can only contribute £3600 gross per annum to a pension thereafter.

garmeg

LHW99 said:

Also if you take any taxed money out once you are 55, then you can only contribute £3600 gross per annum to a pension thereafter.

It's £4,000 gross or £3,200 net.

kangoora

Horribly bad idea, moving to cash at 0.1% interest in a SIPP cash account would guarantee large losses. If you assume a £100k SIPP value and 2% inflation for 10 years you'd be looking at the purchasing power of your £100k being only around £82.5k (guaranteed loss of £17.5k) after 10 years. If you take the opposite view and invest cautiously for a conservative 2% gain you'd be looking at circa £122k value after 10 years. Obviously not guaranteed but illustrates the potential, keeping as cash is a GUARANTEED loss.

swaledale_one

If you had £100k cash in your sipp account and bought games workshop shares in March at £35 a share (just after the CEO sold his shares prior to the announcement that shops were shutting due to covid) then sold them on 7th of August at £92 a share youd now have approx £262,801.83 in your pot right now.

Less risk If you invested £100k on aston martin on 10th july at 45.8p a share and sold today at 66.25p youd have £144,621.41 (new boss started in august + tv show).