Pension Advice Please

zagfles

HL are worth trying, it looks like they allow transfer of DB under £30k, but are a bit vague on their webpage. Give them a ring, they are usually very helpful on the phone https://www.hl.co.uk/pensions/transfer-to-the-sipp

xylophone

 my state pension is almost standard full pension. 

Did you wish to consider voluntary contributions if appropriate?

https://www.moneyhelper.org.uk/en/pensions-and-retirement/state-pension/voluntary-national-insurance-contributions-and-the-state-pension

So when I transfer it, the balance will stay at 19k then, that's good to know. Would I be allowed to withdraw the money within weeks of transferring it, do you think ? 

Once transferred to the new provider, you should be able to bring your pension into payment.

You could take the 25% tax free Pension Commencement Lump Sum ( £4750) leaving  £14,250 to be taken as income over the remainder of this tax year and next.

Remember though 

https://forums.moneysavingexpert.com/discussion/comment/78658494/#Comment_78658494

Although you will need to watch out for this with A J Bell

 Additional charge for transferring in a pension to your SIPP and then transferring your SIPP to another provider or closing it within 12 months -  £295 

When you ring round available providers you will need to check terms and conditions.

And when you draw your first "income" payment, you may be taxed, even though you would be within your personal tax allowance - see explanation here

https://adviser.royallondon.com/technical-central/pensions/benefit-options/emergency-tax-and-lump-sum-withdrawals/

You would need to reclaim as explained in the link.

Sheba42

zagfles said:

HL are worth trying, it looks like they allow transfer of DB under £30k, but are a bit vague on their webpage. Give them a ring, they are usually very helpful on the phone. 

Thank you zagfles. When I clicked on your link, I notice it says if you're transferring to be wary of having to pay excessive exit fees. 
So am I likely to be charged a fee by my current provider for leaving them ? 

Sheba42

xylophone said:

 my state pension is almost standard full pension. 

Did you wish to consider voluntary contributions if appropriate?

So when I transfer it, the balance will stay at 19k then, that's good to know. Would I be allowed to withdraw the money within weeks of transferring it, do you think ? 

Once transferred to the new provider, you should be able to bring your pension into payment.

You could take the 25% tax free Pension Commencement Lump Sum ( £4750) leaving  £14,250 to be taken as income over the remainder of this tax year and next.

Remember though 

Although you will need to watch out for this with A J Bell

 Additional charge for transferring in a pension to your SIPP and then transferring your SIPP to another provider or closing it within 12 months -  £295 

When you ring round available providers you will need to check terms and conditions.

And when you draw your first "income" payment, you may be taxed, even though you would be within your personal tax allowance - see explanation here

You would need to reclaim as explained in the link.

Thank you xylophone 👍

Yeah my husband was always on at me to pay voluntary contributions after I left my job but I've never done it. Do you think I should? 

Yeah taking the 25% 4k is a good idea but I was thinking I may aswell take my full tax free allowance for the year which is around 12k I think.  Do you agree? 
Then take 7k next year? 
That way I'd also avoid the £295 charge as I would keep it open longer than a year wouldn't I?  Have I got this right? 

Sheba42

Diplodicus said:

Sheba42 said:

Can anyone kindly recommend another pension provider I could transfer it to, how do I do this and what I should expect to pay in charges to do this? 

AJ Bell say this:

"I can confirm our stance on defined benefit schemes below £30,000 is that we can accept them.

To transfer a defined benefit/final salary pension to your AJ Bell Youinvest SIPP, please print and complete the below SIPP transfer form:


Please post this form to us along with the transfer out paperwork you’ve received from your current provider. Please ensure that we receive this form at least 10 working days before the CETV expiration date, to ensure that we can instruct this in time.

As the defined benefit/final salary pension is valued at less than £30,000, I can confirm that you should not need to seek financial advice prior to the transfer.

If you have any further queries, please feel free to contact us."


There should be no charge for the transfer; you would pay a peppercorn sum to AJ Bell each month. 

Thank you Diplodicus. 👍
Do you know how much I'd have to pay AJ Bell every month once I'd transferred? 

eskbanker

Sheba42 said:

Do you know how much I'd have to pay AJ Bell every month once I'd transferred? 

Depends on whether it's left as cash (no charge) or invested in funds or shares: https://www.youinvest.co.uk/sipp/charges-and-rates

Sheba42

MallyGirl said:

Sheba42 said:

Yes Mallygirl I have,  my state pension is almost standard full pension. 

Thanks Albermarle. I think £700 per year  isn't worth keeping as that's only £15 per week. 
Do you not think I'm better taking the 19k now? 

So when I transfer it, the balance will stay at 19k then, that's good to know. Would I be allowed to withdraw the money within weeks of transferring it, do you think ? 

It depends on what you are going to do with the £19k now. If you just put it in savings its value will erode due to inflation. If you have limited life expectancy then maybe it is worth getting it out over a couple of years to pay no tax.
On the other hand if all you have is this and the state pension then £700 a year, increasing with inflation (or whatever factor they use) could be making a decent dent in the gas bill (or whatever) for the rest of your life. After 20 years (possibly less) you are likely to be better off with the pension rather than taking it out as cash.

Thanks Mallygirl. My thinking is that I could be dead by then and then I'd lose the money altogether. I don't have a life limiting illness or anything, I think as I've got older,  I'm just a tad more aware of my own mortality. 

20k right now would allow us to have a nice few holidays while I'm still in the land of the living 😄 

zagfles

Sheba42 said:

zagfles said:

HL are worth trying, it looks like they allow transfer of DB under £30k, but are a bit vague on their webpage. Give them a ring, they are usually very helpful on the phone. 

Thank you zagfles. When I clicked on your link, I notice it says if you're transferring to be wary of having to pay excessive exit fees. 
So am I likely to be charged a fee by my current provider for leaving them ? 

I don't think DB pensions have "exit fees" as such, or if they do it's already included in the CETV. The reference to exit fees probably refers to personal pensions etc. But HL will know. Could also be worth a chat with pensionwise, free govt guidance service https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

Sheba42

zagfles said:

Sheba42 said:

zagfles said:

HL are worth trying, it looks like they allow transfer of DB under £30k, but are a bit vague on their webpage. Give them a ring, they are usually very helpful on the phone. 

Thank you zagfles. When I clicked on your link, I notice it says if you're transferring to be wary of having to pay excessive exit fees. 
So am I likely to be charged a fee by my current provider for leaving them ? 

I don't think DB pensions have "exit fees" as such, or if they do it's already included in the CETV. The reference to exit fees probably refers to personal pensions etc. But HL will know. Could also be worth a chat with pensionwise, free govt guidance service. 

Yeah thanks zagfles, I called pension wise last week and it was useless. Any time I asked a question, he just read out a script he had in front of him, it was very frustrating. 
Which is why I'm now here, getting useful advice 😄👍

xylophone

Yeah taking the 25% 4k is a good idea but I was thinking I may aswell take my full tax free allowance for the year which is around 12k I think.  Do you agree? 
Then take 7k next year? 

You seem to be indicating that at the minute, you have no personal income of any kind (salary/benefits/interest) so are not using your Personal Allowance at all?

You don't even make use of Marriage Allowance?

https://www.gov.uk/marriage-allowance

For a person with no income whatsoever, not using Marriage Allowance, and £19,000 in the pension pot.

the PCLS is tax free.

The balance counts as taxable income.

Thus after the PCLS  he could take £12, 570 in the current tax year from the taxable income and pay no tax.

This gives £4,750 + £12,570 = £17320.

The balance ( £1680) could be taken in the following tax year, using only a tiny amount of  the PA so tax free.

When  comparing any SIPPS that may be available don't forget to check for drawdown ( or any other) charges there might be.

https://monevator.com/compare-uk-cheapest-online-brokers/