Move company pension into SIPP prior to drawdown

Sporidium

Hello

I retired from work nearly two years ago, and I'm just coming up to State Pension Age.  I've been living off a small Section 32 pension pot that had a nice high tax-free cash component.  In about a year, I plan to start drawing down a larger pot of around £600k currently with Scottish Widows.  This isn't in a SIPP, but was a company scheme from my previous employer.

I'm thinking of moving this pot to a SIPP with II, because of their favourable fee model for larger pots.  Even though SW capped my fees in a deal with my employer, I think I can probably do better with II.  Also, the default SW funds I'm invested in are pretty poor, bottom quartile performers.  The final reason is that I reckon the mechanics of drawdown might be smoother with II than SW.

Is there anything obviously wrong with this plan?

How easy is the drawdown process with II compared to other similar platforms?

Any responses would be welcome.

Thanks

Albermarle

Nothing obviously wrong. SW do not have the best reputation for good customer service and I think it is probably a good idea to use a slicker more modern platform for drawdown. Although I have no personal experience with II, their fixed fee model is beneficial for larger pots.
Just a couple of points:
The % fee chargers ( AJ Bell, Fidelity, HL etc) have low caps on fees for exchange traded products. This means shares; ETF's and Investment Trusts. However these caps do not apply to funds/OEICs which are what most people invest in . However their normal platform fees are reduced for bigger pots. Also there are some generous cashback fees for pension transfers intermittently on offer.

Sporidium

Thanks Albemarle, that's a useful tip on uncapped OEIC fees.
I'd forgotten about the pension transfer incentives - II were offering one a few months ago but alas have now withdrawn it.  There are still offers available via referral sites like Quidco and TopCashback.
I think I'll start the transfer process in the next few weeks.
Cheers again.

doodlector

ii are doing the SIPP transfer offer again.  You need to initiate before 31st July.
https://www.ii.co.uk/existing-customer/sipp

Also make sure there are no special benefits from your existing pension that you would lose by transferring to a SIPP.

BoxerfanUK

Don't know anything about them so may start a thread asking about them..... but 'Nutmeg' are offering 3K or 300,000 Avios for pension transfers to them by 15th August 2023
https://www.nutmeg.com/promo/transfer-offer2023

Albermarle

BoxerfanUK said:

Don't know anything about them so may start a thread asking about them..... but 'Nutmeg' are offering 3K or 300,000 Avios for pension transfers to them by 15th August 2023
https://www.nutmeg.com/promo/transfer-offer2023

Nutmeg are a robo advisor, so the charges are a bit higher than you can get elsewhere.
However this transfer offer looks very generous !
I will start a new thread about it.

Doctor_Who

Sporidium said:

Hello

I retired from work nearly two years ago, and I'm just coming up to State Pension Age.  I've been living off a small Section 32 pension pot that had a nice high tax-free cash component.  In about a year, I plan to start drawing down a larger pot of around £600k currently with Scottish Widows.  This isn't in a SIPP, but was a company scheme from my previous employer.

I'm thinking of moving this pot to a SIPP with II, because of their favourable fee model for larger pots.  Even though SW capped my fees in a deal with my employer, I think I can probably do better with II.  Also, the default SW funds I'm invested in are pretty poor, bottom quartile performers.  The final reason is that I reckon the mechanics of drawdown might be smoother with II than SW.

Is there anything obviously wrong with this plan?

How easy is the drawdown process with II compared to other similar platforms?

Any responses would be welcome.

Thanks

I've used II for many years and have recently started withdrawing money from my SIPP via UFPLS (sorry, can't comment on drawdown). The whole UFPLS process can be done online (some online forms to complete and boxes to tick) in 10-15mins and the money is in my current account within 10days. The service at II has improved a lot over the years and the simple fixed-fee structure with no clauses about % fees being capped if you only hold shares/ETFs/ITs etc works for me.

Sporidium

doodlector said:

ii are doing the SIPP transfer offer again.  You need to initiate before 31st July.
<link>

Also make sure there are no special benefits from your existing pension that you would lose by transferring to a SIPP.

That was a good spot, doodlector, thanks!  Dunno how I missed that offer.
I've kicked off the transfer of the pension to II, as it's just a bog-standard DC pot with no special protections or benefits.
There was a slight false start as I initially requested in-specie, which Scottish Widows don't support on outward transfers, but hopefully a cash transfer will go through a little faster anyway.

Sporidium

Just to close off this topic, my pension transfer from Scottish Widows into an II SIPP was completed today just 17 days after being requested.  That may be normal for ORIGO cash transfers, but it impressed me no end as I was fearing a much longer process.