Questions ABOUT 2 Pension Pots and choosing an income drawdown

NoMore

Fast_Muchly said:

LHW99 said:

It's the last bit that has the clue:

"Your plan has a valuable guarantee which you would lose........"

That means it may not be straightforward to transfer it - someone else on here will probably know the policies and can explain more.

All the last bit means is on the plan that is closed is its guaranteed to go up by 4% a year and thats is why that plan is now closed and all customers were started in a new millenium plan . I have a gut feeling i have had alot of money in a useless plan a very long while but it is what it is .

It means much more than that, as LHW99 has indicated, this can make it a bit more complicated and expensive to transfer. 

Fast_Muchly

NoMore said:

Fast_Muchly said:

LHW99 said:

It's the last bit that has the clue:

"Your plan has a valuable guarantee which you would lose........"

That means it may not be straightforward to transfer it - someone else on here will probably know the policies and can explain more.

All the last bit means is on the plan that is closed is its guaranteed to go up by 4% a year and thats is why that plan is now closed and all customers were started in a new millenium plan . I have a gut feeling i have had alot of money in a useless plan a very long while but it is what it is .

It means much more than that, as LHW99 has indicated, this can make it a bit more complicated and expensive to transfer. 

Could someone please elaborate on that as all i see is the unit price goes up a guaranteed 4% a year which can lead to nothing as depends on if the actual unit price doesnt fall anyway . But cant the plan just be closed then im not getting 4% a year as im popping into an income drawdown plan .Can you please explain then and not just say it means alot more than that and then leave me wondering , but thanks for the help . 

NoMore

@dunstonh is probably the best to explain, as all I know its not as simple to transfer as if it was a normal DC plan.

Linton

NoMore said:

Fast_Muchly said:

LHW99 said:

It's the last bit that has the clue:

"Your plan has a valuable guarantee which you would lose........"

That means it may not be straightforward to transfer it - someone else on here will probably know the policies and can explain more.

All the last bit means is on the plan that is closed is its guaranteed to go up by 4% a year and thats is why that plan is now closed and all customers were started in a new millenium plan . I have a gut feeling i have had alot of money in a useless plan a very long while but it is what it is .

It means much more than that, as LHW99 has indicated, this can make it a bit more complicated and expensive to transfer. 

Fortunately for the OP guaranteed investment returns are not a safeguarded benefit  and are therefore not a problem with a transfer.  Any other guarantees, particularly a guaranteed annuity rate, could be a different matter.

Perhaps the difference between the transfer rate and the retirement rate may be simply a matter of timing - eg waiting for the appropriate year end.

As the OP has confirmed that SL are able to provide drawdown It would seem there is no problem for the OP either transferring it elsewhere or keeping it where it is.  That could be a matter of the facilities offered by SL drawdown.  The next question is whether there are any issues with the Pru pension either with drawdown or transferring.  If not I would say that merging the pensions to a SIPP or similar for drawdown would be less hassle in the long term.

Linton

Fast_Muchly said:

NoMore said:

Fast_Muchly said:

LHW99 said:

It's the last bit that has the clue:

"Your plan has a valuable guarantee which you would lose........"

That means it may not be straightforward to transfer it - someone else on here will probably know the policies and can explain more.

All the last bit means is on the plan that is closed is its guaranteed to go up by 4% a year and thats is why that plan is now closed and all customers were started in a new millenium plan . I have a gut feeling i have had alot of money in a useless plan a very long while but it is what it is .

It means much more than that, as LHW99 has indicated, this can make it a bit more complicated and expensive to transfer. 

Could someone please elaborate on that as all i see is the unit price goes up a guaranteed 4% a year which can lead to nothing as depends on if the actual unit price doesnt fall anyway . But cant the plan just be closed then im not getting 4% a year as im popping into an income drawdown plan .Can you please explain then and not just say it means alot more than that and then leave me wondering , but thanks for the help . 

1) You cannnot "close" a pension without doing something with the money.  The restrictions are on what you can do with the money.  However as said above this does not appear to be an issue.
2) Does the 4% depend on whether the unt price goes up?  Normally guarantees mean guarantees.

dunstonh

The millennium fund is the with profits fund without a guaranteed growth rate.  The other has the 4% guaranteed minimum growth rate.

Guaranteed growth rates are not a safeguarded benefit but can be valuable.      

It is also worth noting that example projection is using the current value of the plan and not the transfer value.  This is quite common with projections that include WIth Profits funds.   You saw it a lot with endowments where the projections would often give a lower value than the surrender value.  In some cases, the projections would be lower than the guaranteed minimum maturity value.  It led to a lot of people surrendering endowments who didn't realise theirs was better than they thought.

So, in this case, the projection is from £88,452.97  and not from the current value of £124,437.08.  And remember that projection is synthetic.   It is in today's terms and uses the FCA-controlled projection rates.

edit: hold off on this as the lower figure doesn't actually appear to be a projection.  I will see if I can find anything out about these when I get a chance as that is not the normal layout for SL plans.  

Fast_Muchly

dunstonh said:

The millennium fund is the with profits fund without a guaranteed growth rate.  The other has the 4% guaranteed minimum growth rate.

Guaranteed growth rates are not a safeguarded benefit but can be valuable.      

It is also worth noting that example projection is using the current value of the plan and not the transfer value.  This is quite common with projections that include WIth Profits funds.   You saw it a lot with endowments where the projections would often give a lower value than the surrender value.  In some cases, the projections would be lower than the guaranteed minimum maturity value.  It led to a lot of people surrendering endowments who didn't realise theirs was better than they thought.

So, in this case, the projection is from £88,452.97  and not from the current value of £124,437.08.  And remember that projection is synthetic.   It is in today's terms and uses the FCA-controlled projection rates.

Totally lost me there Dunston sorry . 

Are you saying then i havent got £131k i have less or i have more . 

I thought these were actual based figures for my plan not estimates at all like they use to do , i only half get what yuor saying because i thought these quotes were on actually what i have .

Basically £88k is the plan value
£125k is if i transfer to another plan and invest it all with term bonus included
£131k is if i actually take my pension with them or someone else with terminal bonus included.

Is this not correct in my understanding. 

Fast_Muchly

With all this in mind can someone advise a decent financial advisor i live in the county of Nottinghamshire  roughly around the mansfield area .Or recommend some really good drawdown companies. 

What im pretty certain i want to do at the end of this year poss before is take both pensions roughly around £161k  , take my 25% tax free and put the rest roughly around £120k into a medium risk drawdown plan and take 5% a year from it and partially retire .Already earned full state pension and im 57 in December . 

JohnWinder

https://www.evidenceinvestor.com/find-an-adviser/. They might be able to help.

Linton

Fast_Muchly said:

With all this in mind can someone advise a decent financial advisor i live in the county of Nottinghamshire  roughly around the mansfield area .Or recommend some really good drawdown companies. 

What im pretty certain i want to do at the end of this year poss before is take both pensions roughly around £161k  , take my 25% tax free and put the rest roughly around £120k into a medium risk drawdown plan and take 5% a year from it and partially retire .Already earned full state pension and im 57 in December . 

In my view, the best bet  for an advisor for circumstances like your own is a local small, perhaps one person, company.    Firstly make sure that they are IFAs, the I is vital as it ensures they are fully regulated and can provide advice solely dependent on your particular circumstances.There are a number in Mansfield  - Google "Mansfield IFA" and ignore the paid-for national company adverts.  If you can get recommendations from friends and family that would be useful.  Select 3 and arrange free half hour meetings with each where you can describe your circumstances and they can explain what they can do for you and their charges.  Then go with the one you feel most comfortable with.

For drawdown you dont look for a specific drawdown company but rather a "Platform" ie an online SIPP (Self Invested Personal Pension) provider of which there are perhaps 10 main ones available.  You will see them mentioned many times in this forum.  (For example Hargreaves Lansdown, AJ Bell, Interactive Investors, Fidelity etc etc). Any mainstream SIPP provider will provide a full drawdown service.  They all work in much the same way, the main differences being charges, sophistication of website, and level of service.