Personal pension question 🤔

MASUK1010

Hi, my Prudential pension date is nearly upon me and I've decided to take 25% tax-free, then do 'income drawdown' on the rest.
Now my question is, can I take the 25% from the Pru and put the remaining money in another companies drawdown product or do I have to transfer the whole pot before taking the 25% etc?

Hopefully that makes sense 😀

zagfles

You could probably do either but might be easier transferring before taking the tax free cash.

DE_612183

surely if you transfer 75%, then you can only take 25% of the 25% thats left tax free - ie 6.5%(ish)

zagfles

DE_612183 said:

surely if you transfer 75%, then you can only take 25% of the 25% thats left tax free - ie 6.5%(ish)

OP was asking about taking the tax free cash before or after the transfer. If before, then the remaining 75% is fully crystallised and no more tax free cash available.

L9XSS

DE_612183 said:

surely if you transfer 75%, then you can only take 25% of the 25% thats left tax free - ie 6.5%(ish)

But you can still take 25% from the 75% pot as well. As zagfles states may be better for the OP to transfer the whole amount if they wish to move provider then take the 25% TFLS then commence drawdown. I’ve recently started consolidating my pensions, currently AJ Bell, HL, Pensionbee to my main SIPP. Easier to manage and I’m happy with the fees, website and ease of use of trading ETFs within there platform.

dunstonh

Hi, my Prudential pension date is nearly upon me and I've decided to take 25% tax-free, then do 'income drawdown' on the rest.

Not the most efficient way to do it but if you need to spend the 25% all in one go, then fair enough.

Now my question is, can I take the 25% from the Pru and put the remaining money in another companies drawdown product or do I have to transfer the whole pot before taking the 25% etc?

either way is possible.

Albermarle

I think that the Pru may insist on a 3% advisor fee to move your pot into drawdown with them. We have had posters in the past complaining about this . However you would need to check, although they can be slow to respond.
Personally I would be thinking about transferring out to a more modern flexible provider first before doing anything else.

MASUK1010

Thanks for your inputs everyone. I guess my main concern is if I take the pot early or later than the set date, I'll be liable to the MVR. If I take it when it matures the MVR isn't applicable but how do I go about moving the money without incurring any other fees . Pru have merged with M&G Wealth, that would be the easy option but there reviews aren't great and yes they want to charge for advice!

My favourites (so far) are Vanguard, AJ Bell, HL and apparently Aviva are strong too!

dunstonh

 If I take it when it matures the MVR isn't applicable but how do I go about moving the money without incurring any other fees

You transfer the pension when no MVR is being applied.

 Pru have merged with M&G Wealth, that would be the easy option but there reviews aren't great and yes they want to charge for advice!

Actually, it was a demerger rather than a merger.   M&G and the UK arm of Pru was demerged from Pru plc back in 2019.    

Using Pru and M&G is not an easy option.  Pru still have to transfer the plan and go through the process even though it is in-house.   So, if you are going to go through the process, you may as well look at the bigger picture.

MASUK1010

dunstonh said:

 If I take it when it matures the MVR isn't applicable but how do I go about moving the money without incurring any other fees

You transfer the pension when no MVR is being applied.

 Pru have merged with M&G Wealth, that would be the easy option but there reviews aren't great and yes they want to charge for advice!

Actually, it was a demerger rather than a merger.   M&G and the UK arm of Pru was demerged from Pru plc back in 2019.    

Using Pru and M&G is not an easy option.  Pru still have to transfer the plan and go through the process even though it is in-house.   So, if you are going to go through the process, you may as well look at the bigger picture.

Thanks for that. So wait until it matures then transfer the pot in full and then take the 25% etc as and when needed. Do you know if the Pru have transfer fees?

dunstonh

Thanks for that. So wait until it matures then transfer the pot in full and then take the 25% etc as and when needed. Do you know if the Pru have transfer fees?

Pru had many versions of their pension plans over the decades.   They also had different versions for the different distribution methods (i.e. the Pru rep had different versions to IFAs).   So, you would need to check your individual plan to be sure.

In respect of the "modern" pru product.  All I have done is transfer people out of it who ended up in it through Pru's in-house salesforce or from a DB transfer by someone else.   I even had one client who paid Pru for that internal transfer, release their mistake, and then paid us to put it right.   So, get it right first time.