Timline to draw tax free cash after 55

dunstonh

In any case 3% seems like an awful lot - it was stated by Alermarle above that Pru also insists that you have to do it this way (which I would surely think must be against some kind of anti competition laws).  That would be a 30K charge on a 1M pot.

Pru do not insist you do that way.    It is only if you choose to use Pru's salesforce to do it.    If you choose to use a cheaper advice service then you are free to do so.  Also, you don't need to use an advice service and you will avoid an advice fee.

Think of it a bit like asking 5 builders to quote a job.   You will get 5 different quotes.  The differences could be tens of thousands of pounds apart.    Pru (or any of the others) are just one of those giving their price.  You are not forced to use them.

Pat38493

dunstonh said:

In any case 3% seems like an awful lot - it was stated by Alermarle above that Pru also insists that you have to do it this way (which I would surely think must be against some kind of anti competition laws).  That would be a 30K charge on a 1M pot.

Pru do not insist you do that way.    It is only if you choose to use Pru's salesforce to do it.    If you choose to use a cheaper advice service then you are free to do so.  Also, you don't need to use an advice service and you will avoid an advice fee.

Think of it a bit like asking 5 builders to quote a job.   You will get 5 different quotes.  The differences could be tens of thousands of pounds apart.    Pru (or any of the others) are just one of those giving their price.  You are not forced to use them.

OK thanks Dunstoh so then you say that Albamarle was incorrect to state that Pru insists that you use only their advice.  

In the meantime I found some documents that my old DC pension was transferred by a TBOP into the Aviva scheme in 2019 and it clearly states in the FAQs and suchlike that it has pension flexibilities - Anuity / Drawdown / Lump sum.   It also states that if I withdraw lump sums it would be limited to 6 per year "without charge". 

Therefore it seems that I am already in the correct type of scheme.

I am also able to manually change my own funds on something called "membersite" but it appears to be down at the moment.  I was unable to find information about any charges for moving into Drawown but either it's "without charge" as mentioned above or maybe the charges are also available on membersite.

dunstonh

OK thanks Dunstoh so then you say that Albamarle was incorrect to state that Pru insists that you use only their advice.  

Albermarle was right in the context it was written but there is a bit of misunderstanding thrown in.

The majority of Pru pensions are legacy products that do not support drawdown.  That means a new product has to be bought.  
Pru retails their products only via intermediaries.   In this case, that means either via IFAs or through their own salesforce.   You cannot buy their products any other way.    So, if you have a legacy Pru contract that doesn't support drawdown and you tell Pru that you want to do drawdown, it will reply that it needs to be moved to their modern plan and they will outline the charges to do that.    They won't tell you that you can buy someone else's product or that you can use an IFA.  They will give their charges and let you decide.

If you have a legacy product that does not support drawdown then many of the providers will charge to move you to their modern product if it is done via their salesforce.   Some do not but don't assume that makes them cheaper.  Often the product charges are higher in those cases and over the long term, that can actually cost more despite you thinking you are avoiding an initial charge.

Or you can use a provider that caters for the direct-to-consumer market where you DIY (i.e provider won't tell you what is best, how it should be done or how you should invest - you decide).  They have no liability for complaint if you mess it up.  But your charges will be lower.  Although I will add the caveat that some DIY options are more expensive than using an advised solution.

Albermarle

Pat38493 said:

dunstonh said:

Pat38493 said:

Albermarle said:

Aviva mainly work via financial advisors nowadays . I would just check that they will not insist that you go through an advisor to start drawdown. Maybe as an existing customer that might not be necessary., their policies seem not totally clear.
For example The Pru insist you go through one of their advisors, and charge you 3% for the privilege.

3% of what for doing what?

They charge you 3% of the entire balance for moving the fund into drawdown?  That cannot be right can it?  That is complete daylight robbery?

If you choose to use them to provide advice and service (even though the advice is very limited and usually restricted that they can only move their own branded products and not those of others) then that is your choice.  You don't have to use them.    

And no, they are not charging 3% for moving the fund into drawdown.  They are charging 3% for setting up a new pension that will allow drawdown.  

OK understood but I am pretty sure this fund already allows move into drawdown - I will go back to the documents to check.

In any case 3% seems like an awful lot - it was stated by Alermarle above that Pru also insists that you have to do it this way (which I would surely think must be against some kind of anti competition laws).  That would be a 30K charge on a 1M pot.

There have been many posters complaining about it . The way out is to transfer the pension out.