Transfer SIPP to pension fund?

C_Mababejive

Hi all,

I have a chunk of money in a SIPP, about £78k. 

I am not an expert in investing and i am wondering whether i can or should just transfer it to a pension product with for example, Royal London?

Maybe they could manage it better and provide a greater return?

If it rests in my SIPP (AJB) , can anyone recommend any low maintenance pension income funds/ITs that i could invest in that are structured for pension income? What sort of return might i expect in terms of income?

Thanks all

Linton

Royal London won't manage your pension any more than your SIPP provider.  They will just give you a different set of funds to choose from.  If you want someone to manage your pension for you in terms of choosing funds etc you should consult an IFA. or perhaps use a robo-service such as Nutmeg (just an example, not a recommendation).

Managing funds better does not necessarily mean provide a better return.  Broadly speaking the higher the return you seek the greater the risk in terms of volatility particularly during crashes.  It would be foolish to take a risk sufficiently high that the falls in the next crash cause yoy to panic and sell all your investments.  You need to get a return that corresponds to an appropriate risk level. An IFA can help you determine that.

When you say pension income funds do you mean that you are retiring and want to take income from your pension?  Or something else? 

Assuming you do want to take ongong income from your pension there is a lot to learn.  Some basics:
you have 2 broad choices:
1) Hold funds that produce dividends/interest
2) Hold funds that grow in value and sell them as and when you need the money
or some mixture of the two.  Your may not want to take a monthly income from a SIPP as this can be a hassle.  Many people just take 1 lump sum a year.

If you want the income to be sustainable in the long term it is normally suggested that you dont take more than about 3.5% of the initial value and increase this with inflation.  The risk is that if there is a significant crash in the first few years taking too much income could result in you lasting longer than your pension pot.

A quite different alternative is to buy an annuity.  WIth increased interest rates they are looking rather more attractive than a few years ago.

Perhaps some peope can suggest books or other reading matter.

Marcon

C_Mababejive said:

Hi all,

I have a chunk of money in a SIPP, about £78k. 

I am not an expert in investing and i am wondering whether i can or should just transfer it to a pension product with for example, Royal London?

Maybe they could manage it better and provide a greater return?

If it rests in my SIPP (AJB) , can anyone recommend any low maintenance pension income funds/ITs that i could invest in that are structured for pension income? What sort of return might i expect in terms of income?

Thanks all

When you say 'structured for pension income' that sounds like an annuity, or at least some sort of 'regular access' account. Given you're on target for a 40/60 final salary pension https://forums.moneysavingexpert.com/discussion/6429883/db-pension-mpaa-and-other-issues#latest, having a chunk of money in a SIPP or other personal pension that offers you flexible access (i.e. drawdown rather than an annuity) is surely no bad thing?

The fact you have a SIPP (i.e. a defined contribution pension) makes you eligible for a free appointment with PensionWise, assuming you are aged at least 50: https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise?source=pw

Could be time well spent, at no cost to you, getting a clear explanation of various basic issues which might be very helpful.

C_Mababejive

Thanks, i didnt know that i could have a pensionwise appt. I will certainly chase this up. Regarding the people dispensing the advise on these lines, what level of expertise do they have? Are they typically IFA level ?

The reason why i started my SIPP some years ago was for tax efficiency as my  total earnings were/are in the higher tax bracket. 

The investments i hold in it are typically higher levels of equity so higher risk. My thoughts were that i could take that risk as worst case scenario, it would be counterbalanced by the guaranteed index linked income from the DB pension. 

dunstonh

Thanks, i didnt know that i could have a pensionwise appt. I will certainly chase this up. Regarding the people dispensing the advise on these lines, what level of expertise do they have? Are they typically IFA level ?

Not even close to IFA level.  You could be a pensionwise clerk if you wanted.   Pretty much read a manual over the weekend is about as far as it goes.

They do not provide advice. It is generic guidance.  They do not cover all the options (eg multi-wrapper solutions, tax efficient variations or combinations etc and do not take into account commercial reality)

They are quite useful for those with relatively small amounts with few options.   If you have or intend to have multiple wrappers and combination methods are best then they wont be much help.  In my experience, those that have gone to pensionwise first and got an idea in their head from that about what they should do end up doing something different after full advice.   

Its free to you (charges are levied to financial firms to cover cost.  So, there is no harm in giving them a go.  Just remember you wont be getting advice and its not comprehensive.

Albermarle

Thanks, i didnt know that i could have a pensionwise appt. I will certainly chase this up. Regarding the people dispensing the advise on these lines, what level of expertise do they have? Are they typically IFA level ?

Pensionwise appointment is free, so you get what you pay for. Basic guidance.

Marcon

C_Mababejive said:

Thanks, i didnt know that i could have a pensionwise appt. I will certainly chase this up. Regarding the people dispensing the advise on these lines, what level of expertise do they have? Are they typically IFA level ?

No. As my post said, they will give you a clear explanation of basic issues. For many people, that's enough to enable them to take a decision - which in your case might be a decision that you need financial advice!

It's easy to sneer at PensionWise, but given the complete lack of even the most basic understanding which questions on this board repeatedly demonstrate (I'm not referring to this thread, so please don't take umbrage), they fulfil a really valuable function for many people. 

C_Mababejive

Marcon said:

C_Mababejive said:

Thanks, i didnt know that i could have a pensionwise appt. I will certainly chase this up. Regarding the people dispensing the advise on these lines, what level of expertise do they have? Are they typically IFA level ?

No. As my post said, they will give you a clear explanation of basic issues. For many people, that's enough to enable them to take a decision - which in your case might be a decision that you need financial advice!

It's easy to sneer at PensionWise, but given the complete lack of even the most basic understanding which questions on this board repeatedly demonstrate (I'm not referring to this thread, so please don't take umbrage), they fulfil a really valuable function for many people. 

Thanks , i never take umbrage. I'm always open to learning new tricks. It sounds like i could be a pension wise person !