Stakeholder pension transfer to SIPP

nebsta

I currently have a Scottish Widows stakeholder pension invested in a balanced fund. I have had the pension since 2006 and left the UK in 2013 to live in Australia so have not been contributing since then. The current balance is approx. £18000 and the AMC is 0.37%, the fund apparently has no additional fees although it's holdings contain other funds so its not very transparent how what the investment fees are. The total returns of the fund has been 10.99% over the last 10 years whereas the category has returned 17.76% (see https://markets.ft.com/data/funds/tearsheet/performance?s=GB00B09CD744:GBP ).

I am unable to transfer my pension balance to my Australian superannuation so for a while I have been thinking about switching to an AJ Bell YouInvest SIPP and investing 100% in a diversified global ETF to hopefully get better performance. I am currently 34 so quite a while from retirement and not too worried about moving to a higher risk investment. I have chosen AJ Bell partly because the fees seem reasonable and partly because being overseas my choice is more limited as to which companies will allow me to open a SIPP. The AMC for AJ Bell is 0.25% and there would be an additional approx. 0.20% for the EFT charge. I am aware that I will be unable to make additional contributions to the SIPP but have no plans to do so. 

I have to cash out my current fund before transferring because it cannot be held by AJ Bell. Is it worth trying to time the transfer e.g. try to avoid losing money whilst being out of the market by waiting to repurchase until after there is a dip in the market? Or should I just get on with it? 

Also does anyone have any thoughts on any other implications of this transfer? Given its a fairly small amount I will probably just try to take as much out as cash when I can. I am aware that the minimum age for accessing SIPPs is being increased to 57 in line with the state pension changes. I am unclear if this is also the case for the Stakeholder pension but 2 years is not a major deal. Are there any tax implications I should be aware of in switching, especially given I am overseas? 

Marcon

nebsta said:

I have to cash out my current fund before transferring because it cannot be held by AJ Bell. Is it worth trying to time the transfer e.g. try to avoid losing money whilst being out of the market by waiting to repurchase until after there is a dip in the market? Or should I just get on with it? 

Also does anyone have any thoughts on any other implications of this transfer? Given its a fairly small amount I will probably just try to take as much out as cash when I can. I am aware that the minimum age for accessing SIPPs is being increased to 57 in line with the state pension changes. I am unclear if this is also the case for the Stakeholder pension but 2 years is not a major deal. Are there any tax implications I should be aware of in switching, especially given I am overseas? 

You can switch your funds to a cash account at any time and transfer that to the SIPP, putting it into a similar account with the SIPP and (if you think you have the skills to judge the market right) switching funds within the SIPP when you believe the time is right to do so. But for £18,000 just getting on with it sounds like a better bet for the average person.

The forthcoming change to age 57 as the minimum age at which you can access your UK pension applies to all types of (non-state) pension scheme, with some very limited exceptions such as ill health. 

Stakeholders and SIPPs are both types of personal pension, so it is hard to see what tax implications there would be if you simply transfer your funds from one to another.