Wanting to take more than 25% out of pension from Aviva - not given many options.

wildz

My Aviva pension stands at £39400, I can take 25% but need to take around £12000 on top to pay off my mortgage. Spoke to Aviva regarding my plans and was told I needed to transfer it to a drawdown fund or a self investing pension plan, I am clueless regarding looking after my pension myself and am now going to have to decide which provider to transfer it to. Do I take my 25% then transfer? or transfer then take 25% and £12000? 

Can anybody recommend a pension provider that is performing well at the moment? is there a compare web site available? My only option I feel is to take the whole lot out of the pension and pay the tax on it as I am currently working although it will not take me beyond the higher tax bracket.
I will be leaving my job before Easter next year and my wife has just reduced her working week so paying my mortgage off is imperative.

Can anybody give any advice? TIA

dunstonh

Do I take my 25% then transfer? or transfer then take 25% and £12000? 

Transfer it first in the majority of cases.  However, in a minority you may need to take the tax free cash first (i.e. where there is protected tax free cash entitlement).

Can anybody recommend a pension provider that is performing well at the moment?

Pensions don't perform.   The investments you hold in the pension perform.  And nowadays, most of the best pensions are whole of market. i.e. they all offer the same investments from the 30,000 or so that are available.

HappyHarry

wildz said:

My Aviva pension stands at £39400, I can take 25% but need to take around £12000 on top to pay off my mortgage. Spoke to Aviva regarding my plans and was told I needed to transfer it to a drawdown fund or a self investing pension plan, I am clueless regarding looking after my pension myself and am now going to have to decide which provider to transfer it to. Do I take my 25% then transfer? or transfer then take 25% and £12000? 

Can anybody recommend a pension provider that is performing well at the moment? is there a compare web site available? My only option I feel is to take the whole lot out of the pension and pay the tax on it as I am currently working although it will not take me beyond the higher tax bracket.
I will be leaving my job before Easter next year and my wife has just reduced her working week so paying my mortgage off is imperative.

Can anybody give any advice? TIA

We can’t give advice here.

if you are stopping work next Easter, will you have any income then? If not, you could consider taking the taxable monies next tax year when your income and therefore tax to pay could be far lower?

xylophone

You could consider a transfer to  a platform like eg Hargreaves Lansdown.

You could then take the tax free PCLS at any time and (especially if your income will be under your Personal Allowance in 23/24), drawdown the £12,000 required.

Just be aware of the tax treatment and how to reclaim overpaid tax.

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

wildz

I don't want to wait until next year, I need to pay my mortgage off before I finish with current employment, I intend to become partially retired. So will probably go down the drawdown route as no doubt I may take more out after April next year. Thanks

Marcon

wildz said:

My Aviva pension stands at £39400, I can take 25% but need to take around £12000 on top to pay off my mortgage. Spoke to Aviva regarding my plans and was told I needed to transfer it to a drawdown fund or a self investing pension plan, I am clueless regarding looking after my pension myself and am now going to have to decide which provider to transfer it to. Do I take my 25% then transfer? or transfer then take 25% and £12000? 

Can anybody recommend a pension provider that is performing well at the moment? is there a compare web site available? My only option I feel is to take the whole lot out of the pension and pay the tax on it as I am currently working although it will not take me beyond the higher tax bracket.
I will be leaving my job before Easter next year and my wife has just reduced her working week so paying my mortgage off is imperative.

Can anybody give any advice? TIA

You thread is titled '...not given many options' but what other options did you hope to be given? You can take the lot in one go, or transfer to a drawdown fund or a SIPP with Aviva or another provider, giving you total flexibility.

jaypers

Not sure if it is the best approach in your case but might be worth looking at ‘Small Pots’ where you can take 3xPots of £10,000, 25% of each one tax free. I know Aviva support this but it will need to be in the right type of fund. 

greatkingrat

wildz said:

I don't want to wait until next year, I need to pay my mortgage off before I finish with current employment, I intend to become partially retired. So will probably go down the drawdown route as no doubt I may take more out after April next year. Thanks

Just because you are retiring doesn't automatically paying off the mortgage now is the best option. The money in the pension will still be there next year or the year after.

From a tax point of view it will probably be better to wait until next April before accessing the pension.

Marcon

jaypers said:

Not sure if it is the best approach in your case but might be worth looking at ‘Small Pots’ where you can take 3xPots of £10,000, 25% of each one tax free. I know Aviva support this but it will need to be in the right type of fund. 

What would be the advantage in doing so, given that OP has said they are going to be 'partially retired' (so MPAA is unlikely to be an issue, especially as they are busy withdrawing large sums from their pension - or intending to do so). Drawdown would seem a much simpler and more obvious option.

Albermarle

Spoke to Aviva regarding my plans and was told I needed to transfer it to a drawdown fund or a self investing pension plan, I am clueless regarding looking after my pension myself and am now going to have to decide which provider to transfer it to

You are actually currently looking after your pension yourself now. Aviva are only administering the pension, they will not change anything unless you tell them to. IF you never informed them in the past of any investment choices, then they will have used a default investment fund. But that was your choice by default if you see what I mean.

Can you not just ask Aviva to move you into their drawdown pension product ?

HeyYeah

Suggest you speak with PensionWise who are a free government service. They will talk you through your options and explain the terminology. Once you know which method of withdrawing the money you would like to choose, then you can screen the platform providers and see which is best for you.

There are options that will allow you to withdraw only your 25% tax free, then also withdraw only what you need to pay off your mortgage (taxable) (however the options available to you depend on the platform you choose). 

Worth saying that you don't need to withdraw all your funds and take a tax hit. Using Drawdown, you can take your tax free lump sum, then gradually withdraw the rest, paying tax on each withdrawal. If you spread your withdrawals out over a number of years you will be able to use your tax-free personal allowance on each withdrawal, most likely saving you quite a lot of money.

Perhaps it would be worth your while speaking to an IFA, however you can start with PensionWise and doing some background reading.

It's a bit daunting when you first start looking at this stuff, but it will make more sense over time.