newbie SIPP questions

ChilliBob

Hey everyone,
I have a pension pot of ~300k with Scottish Widows which was a workplace pension, an IFA looked into this scheme for me and told me it doesn't have successor drawdown for one, and that I'd be far better off moving to a SIPP. This was something I intended to do anyway so I could have more control over the investments and essentially treat it like I do my Stocks and Shares ISA (but knowing I can't sell and take cash out yet as I'm 38). 

This whole area is pretty new to me, does anyone have any decent guides they'd recommend reading? - there's tonnes out there, but probably loads of rubbish too!

My main concerns:
1. Low cost to hold the pension - so platform fees, % fees etc
2. Successor Drawdown - if I pop my clogs now, or after 75, ideally I want it so that my partner, or my son can inherit the pot without IHT - is that possible?
3. Drawdown - Actually *isn't* a huge concern, of course, if the best platform also happens to be low cost for drawdown then great, but if it's expensive that's not a huge big deal - I don't anticipate needing to draw much from it - I'd prefer to draw from my GIA instead of tax sheltered places (obviously a lot can change in 15-20 years though).
4. Can I actually *do this* myself - i.e. request from a workplace pension to transfer to a SIPP - I assume I don't *need* an IFA for regulatory reasons?

Questions are plentiful, but I'm guessing a decent guide would answer lots of them. One key one though, aside from costs, do *all* SIPPs basically offer the same benefits from the whole successor drawdown/IHT planning type of thing, or are they're differences? - My thought was they were all identical, so choice of platform came down to cost/fund selection etc-  much like it would when choosing a platform for a GIA/ISA account.

For what it's worth I hold an iWeb and II account at the moment, and a Fidelity account for my son (JISA) and partner (SS ISA).

Thoughts/suggestions/links to get the ball rolling in my head would be great. Cheers

Malthusian

1. Workplace pensions often have low costs - what are the charges on yours?

2. The pension can be paid out free of IHT regardless of which provider it is with. You just need to make sure your expression of wish is up to date and that death benefits are not paid to your estate.

Whether your beneficiaries would be able to use nominee flexi-access drawdown does depend on the provider. If it offers this option, a "nominee flexi-access drawdown plan" means they inherit something almost like an ISA on death before age 75, instead of unwrapped cash subject to tax on income and growth. However not all providers offer this option to all beneficiaries. So it is worth asking SW specifically whether your partner and son would be able to use nominee flexi-access drawdown.

In your case you are looking at nominee flexi-access drawdown. If your partner or son received a "nominee flexi-access drawdown plan", and then they died and their beneficiary inherited the funds as a drawdown plan in turn, that would be a "successor flexi-access drawdown plan".

3. Basically irrelevant in your case - you can cross that bridge when you come to it. Tax and legislation, the charging structure, the service standards of whatever pension you choose could all have changed completely in 20 years.

4. If there are no safeguarded rights in the workplace pension you do not need advice to transfer it.

ChilliBob

 Cheers, that's very helpful. I'm not sure of fees, but regardless of them I think I need to move it because of the IHT implications and lack of this succrssor/flex drawdown stuff. The IFA who looked into it said it wasn't an option with that scheme or something similar. 

So different sipps, say II vs Fidelity would differ with this flexi/successor drawdown element? That's interesting, and unexpected!

Thanks again. 

Albermarle

Due to your age then worrying about what drawdown plans your beneficiaries could use is going a bit overboard on the detail in my opinion. As far as I can remember it is the first time anybody on this forum has mentioned it as a criteria for picking a new pension provider.
Otherwise just check out one of the many comparison charts for providers that are available. It is a bit horses for courses as they all have different charging structures that suit different people.
Just as an add on , I have a workplace SW pension and it is the lowest cost one I have. I also have a personal pension ( ex SERPS) and a SIPP . The SIPP is more expensive but gives me a greater choice of investments .

ChilliBob

Do I win some kind of prize then? - For being the first to mention!
Essentially, regardless of my age, the primary thing I want to insure is that if anything happens to me then this pot can be passed on not as part of my estate, to reduce any IHT liability. Anything could happen to any one of us sadly so it seems prudent to consider this from the offset in my eyes.   Surely it's a big consideration for anyone  choosing a pension that if they were to drop down tomorrow their pension pot would pass on IHT free in scheme 1 but be liable to IHT in scheme 2?

I think I should confirm with Scottish Widows what options they have in this regard - the IFA could have been suggesting a move to a SIPP because of the fee they'd get setting it up and managing it, but I don't think so based on our chats together. 

kuratowski

So (echoing Malthusian's answer re point 2) your primary concern is to make sure SW has an up to date Expression of Wishes form, so that the pension can be passed  onto your nominees outside of your estate (in the unfortunate event of your early demise).  The actual mechanism that your nominees would then use to access the funds is a secondary matter.

ChilliBob

At the moment yes, however, I was given the impression that SW wouldn't be able to do anything which would make the pension pot bypass IHT and fall outside my estate, if they can then great.

I'd still want to go for a sip though as this pot at the moment is fairly 'balanced/safe' type default thing - as it's in a tax shelter I want to change that around a bit

kuratowski

I think you have gained the wrong impression.  Have a read here
https://www.scottishwidows.co.uk/retirement/retirement-explained/basics/death-and-pensions/

ChilliBob

kuratowski said:

I think you have gained the wrong impression.  Have a read here
https://www.scottishwidows.co.uk/retirement/retirement-explained/basics/death-and-pensions/

That's entirely possible. There was a shed load going on when I spoke eith this IFA some time ago. I'll get on the blower to SW at some point.

Meanwhile, if I'm content eith ETFS or ITs it seems Fidelity is a decent bet. AJ Bell possibly too. 

dunstonh

At the moment yes, however, I was given the impression that SW wouldn't be able to do anything which would make the pension pot bypass IHT and fall outside my estate, if they can then great.

Something like 99% of pensions fall outside of the estate.  If this is a conventional personal pension plan then unless you have given an explicit nomination rather than an expression of wish, then it will not fall within the estate.
Some plans do not allow for nominee flexible drawdown but require return of fund.  That doesn't make it part of the estate.  It just limits options.

ChilliBob

Thanks @dunstonh
I've actually found a pic I was sent. 
It also detailed the RIY, which was a new term on me! - And reckons the SW RIY is 0.46. I'm not sure how useful it is as I'm not sure how I could generate an RIY for a SIPP based on a specific basket of funds, so it may be better to look into other charges from SW for comparison. 

Not sure what you make of that pic though?