Can you transfer a pension into another, if that has already been placed in drawdown?

Sea_Shell

Basically this...

Some background.    Two DC pensions.   One Aviva, the smaller of the two, and one with Aegon.   The Aegon one has low charges.

Can you put the Aviva into drawdown, and leave the transfer of the untouched Aegon one, until needed, and then transfer it to Aviva at some point in the future.   Can this be either crystallised or uncrystallised funds?

We want to eventually end up with just one pot, but it seems daft to pay higher fees on the larger pot, until it's actually needed.    Obviously, if you can only merge pensions, before they are placed into drawdown, we'd have to do that first, and pay Aviva's fees on the whole pot.

Thanks.

dunstonh

Can you put the Aviva into drawdown, and leave the transfer of the untouched Aegon one, until needed, and then transfer it to Aviva at some point in the future.Can this be either crystallised or uncrystallised funds?

Assuming that the Aviva plan supports the drawdown method you are using (and most legacy plans only support lump sum withdrawals - their main modern plans support all methods), then yes.

Sea_Shell

We'd have to move the current Aviva into a new drawdown product first, yes.

The original plan was to get them pulled together into one pot, and put the whole thing into drawdown, but DH then twigged that the current charges on Aegon are actually zero (as a small minimum payment is still being made in).  There are fund fees.

Which on a pot of £100k, is not to be sniffed at!

Albermarle

With the SIPP I have , it says you can do this , but you have to call them to organise the transfer. As opposed to just doing it on line when only  uncrystallised funds are involved . Maybe same with Aviva ?

Notepad_Phil

I'd be very careful with this as I've come across pension schemes that will not allow transfers in to a pension that has been fully crystalised, so best to get in contact with them to make sure that your scheme will allow the specifics of what you want to do.

dunstonh

I'd be very careful with this as I've come across pension schemes that will not allow transfers in to a pension that has been fully crystalised, 

Generally speaking, if the pension scheme does not offer drawdown functionality, it will not accept transfers in of crystallised benefits.    So, things like stakeholder pensions, legacy pensions, many workplace pensions etc will not.

jamesd

Unless rules changed without me noticing, you can merge crystallised pots but the administration means nobody is willing because you have to track them independently for lifetime allowance.

What seems readily available is transferring uncrystalised then crystallising that at the same place as another crystallised pot, so you end up with one crystallised pot.

Sea_Shell

jamesd said:

Unless rules changed without me noticing, you can merge crystallised pots but the administration means nobody is willing because you have to track them independently for lifetime allowance.

What seems readily available is transferring uncrystalised then crystallising that at the same place as another crystallised pot, so you end up with one crystallised pot.

That sounds doable then.     Move the Aviva pension into their flexi-drawdown version, take the TFLS up front, then (after the start of the next tax year) start drawing down the remaining 75%.    Once that pot is nearing being emptied (c. 3 years), transfer in the uncrystallised pot from Aegon, in total, and then, once transferred take it's 25% TFLS and put the remainder into drawdown.

Does that sound right?

I'm also guessing that depending on growth (+/-), the original pot may last more or less than 3 years, so from a timing POV, he may have to suspend drawdown temporarily, if he needs to wait for the extra funds to come from Aegon. 

jamesd

That seems right.

Incidentally you're planning to use the workaround: just fully draining one drawdown pot then moving on to the next so you have one or one and a nearly drained bit at a time.

MEM62

Sea_Shell said:

Basically this...

Some background.    Two DC pensions.   One Aviva, the smaller of the two, and one with Aegon.   The Aegon one has low charges.

Can you put the Aviva into drawdown, and leave the transfer of the untouched Aegon one, until needed, and then transfer it to Aviva at some point in the future.   Can this be either crystallised or uncrystallised funds?

We want to eventually end up with just one pot, but it seems daft to pay higher fees on the larger pot, until it's actually needed.    Obviously, if you can only merge pensions, before they are placed into drawdown, we'd have to do that first, and pay Aviva's fees on the whole pot.

Thanks.

If Aviva has the higher fee structure but the pensions are otherwise comparable, why are you wanting to move the Aegon pot to Aviva rather than the other way round?   

Sea_Shell

MEM62 said:

Sea_Shell said:

Basically this...

Some background.    Two DC pensions.   One Aviva, the smaller of the two, and one with Aegon.   The Aegon one has low charges.

Can you put the Aviva into drawdown, and leave the transfer of the untouched Aegon one, until needed, and then transfer it to Aviva at some point in the future.   Can this be either crystallised or uncrystallised funds?

We want to eventually end up with just one pot, but it seems daft to pay higher fees on the larger pot, until it's actually needed.    Obviously, if you can only merge pensions, before they are placed into drawdown, we'd have to do that first, and pay Aviva's fees on the whole pot.

Thanks.

If the Viva has the higher fee structure but the pensions are otherwise comparable, why are you wanting to move the Aegon pot to Aviva rather than the other way round?   

Their fees are only non existent because it's currently an old legacy plan.  

He'd lose that deal by moving to drawdown with them.