Best Pension Drawdown Provider

Spivo46

I would like some thoughts or experience related to the best all-round drawdown provider? I am looking for a ready made portfolio that i dont have to manage. A good history of returns on investments, customer service and low fees. I am currently with Royal London who have asked me to ensure i have looked around for options as they say "it may put more money in my pocket"! Return of 5% over 5 year isn't too bad considering the recent market volatility? I do have a strategy but unsure if i need to find a new provider?

gm0

No such thing as "best" for everyone exists - just a few larger platforms and a longer tail of niche ones.

Each varies in the offer (range, digital, costs)

- Cash back offers to transfer in - offset platform costs for a fair time - they assume you will stay
- Trading fees (if you meddle low ones matter more - if you don't it has less impact)
- Range of investment choices and prices
- Channels - phone, digital web, apps etc. whatever you like - or hate.

Returns comparisons other than over exactly the same dates for different portfolios or different funds implementing the same intention are not usually that helpful.  5% could be good or bad - depending on what your portfolio was intended to do.  If it has a lot of bonds in it then it likely did OK early on in your 5 years - until the recent interest rate rapid reversal where significant losses will have occurred on that element.

You can try and do some comparison (for free) by finding your fund or the closest analogue on trustnet web site and graphing some comparisons. Half an hour and an email address are all you need.

Most other retail platforms will have multi-asset funds you could use. 

You can check the prices on HL. II iWeb, Fidelity

And examine the discount available for not using multi-asset for convenience and accepting you have a handful of funds. 

Start with what you want to be invested in.  And whether that is what you have and if not - whether offered by RL

Then consider who you find acceptable (size, reputation, service, digital) - then check they have the investments you want. 

Then you will know who is best - for you. And the cost comparison.  For similar assets.

Then compare that with what you have now and the "difference" will be enough to create intention to switch - or it won't.

You can compare providers on cost and service

You can't really compare providers on performance.

You can compare alternative multi-asset funds on their historic performance but that doesn't tell you much about what their future performance will be in different economic conditions.  Would that it did.

If you have come to this via an occupational pension that happens to be with RL rather than an RL retail product.  Then you need to fully understand what they sent you about your current scheme and membership.   Leaving is a one way transaction with typically no going back.  The terms of older pensions can be poor, expensive, limited range - but they can also be very good.  It is impossible to provide generic "guidance" on any individual example without the detail.

dunstonh

 I am currently with Royal London who have asked me to ensure i have looked around for options as they say "it may put more money in my pocket"! 

That will be referring to annuities rather than drawdown.

 I do have a strategy but unsure if i need to find a new provider?

It depends on your strategy.
For example, RL is a good provider.  They are one of the largest providers of pensions in drawdown in the country.   However, their product is basic and some may find that limiting (cannot bucket, no cash float).    Although as you want a simple solution, that may not be a bad thing.

Linton

The returns on investments depend almost entirely on which fund(s) you use, the effect of the choice of provider is relatively minor.  All the mainstream providers seem to provide an adequate online drawdown service.   All the providers I have used provide adequate customer service. The main differences are in the functionality of the website and the range of investments offered.

So unless you have some particular niche needs you are basically left with cost as the main differentiator  The cheapest may depend on the size of your pension pot. How big is it?

You say you have a strategy.  Perhaps you can say what it is.  A constant 5% return over 5 years is unlikely to provide you with a good inflation linked income. 

Have you considered buying an annuity rather than running a large pension pot?  Once you have bought one they pay out a guaranteed amount each month with absolutely zero effort or knowledge on your part. See https://www.hl.co.uk/retirement/annuities/best-buy-rates for typical costs.

Spivo46

Linton said:

So unless you have some particular niche needs you are basically left with cost as the main differentiator  The cheapest may depend on the size of your pension pot. How big is it?

You say you have a strategy.  Perhaps you can say what it is.  A constant 5% return over 5 years is unlikely to provide you with a good inflation linked income. 

Have you considered buying an annuity rather than running a large pension pot?  Once you have bought one they pay out a guaranteed amount each month with absolutely zero effort or knowledge on your part. See https://www.hl.co.uk/retirement/annuities/best-buy-rates for typical costs.

Thank you - responses are useful 

This pot is only £400k and the total management cost is 0.4% (it has a 0.6% discount)

I want to take a mix of a small TFLS and £12,570 each year for 2 years till my state pension kicks in. I find a suitable part time job it will avoid this earlier access and moving to drawdown

I am hoping, even if i stay at RL or switch, the 5% was due to recent markets / world events and will it improve long term (but no crystal ball eh)

i have considered annuity, it is tempting but not prepared to gamble with popping my clogs and leaving it all to them. if i build in payments after death to my family the monthly payments drop dramatically. 

BoxerfanUK

I don't fancy the idea of a 'lifetime' annuity but something I and my OH have been looking into for her (and still researching) is a 'fixed term' annuity.  In her case, a rough quote based on a 462k pot for a 5 year fixed income of 12,570 pa and after 5 years a guaranteed maturity sum back of 535K to either buy another annuity or put into a SIPP for drawdown.  5.45% annual return guaranteed for 5 years and no need to worry about what the equity or bond markets do for 5 years!!  I keep thinking it seems to good to be true but........!!!!

I believe if you go through an IFA you can take out one from as low as two years.

https://www.youtube.com/watch?v=RIq6HjvgC0o

zagfles

If you want to drawdown but not manage your investments yourself, or hand over a large chunk of your pension to an IFA, then all major providers now offer "investment pathways", see 

https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/drawdown-investment-pathways

german_keeper

This pot is "only" £400k? Only on this forum!! Light hearted comment by the way. 

Spivo46

BoxerfanUK said:

I don't fancy the idea of a 'lifetime' annuity but something I and my OH have been looking into for her (and still researching) is a 'fixed term' annuity.  In her case, a rough quote based on a 462k pot for a 5 year fixed income of 12,570 pa and after 5 years a guaranteed maturity sum back of 535K to either buy another annuity or put into a SIPP for drawdown.  5.45% annual return guaranteed for 5 years and no need to worry about what the equity or bond markets do for 5 years!!  I keep thinking it seems to good to be true but........!!!!

I believe if you go through an IFA you can take out one from as low as two years.

https://www.youtube.com/watch?v=RIq6HjvgC0o

Yes, i like the idea of this if i can do a 3 year option. I will investigate further. 
Using Canada Life, if i put in £266,000 over 5 years it pays out 14,000 each month. At the end of the 5 years i will get the £266,000 back to do with as i please. That is attractive to me, removing that uncertainty while the world comes to its senses!
Thanks

Julezy101

Spivo46 said:

BoxerfanUK said:

I don't fancy the idea of a 'lifetime' annuity but something I and my OH have been looking into for her (and still researching) is a 'fixed term' annuity.  In her case, a rough quote based on a 462k pot for a 5 year fixed income of 12,570 pa and after 5 years a guaranteed maturity sum back of 535K to either buy another annuity or put into a SIPP for drawdown.  5.45% annual return guaranteed for 5 years and no need to worry about what the equity or bond markets do for 5 years!!  I keep thinking it seems to good to be true but........!!!!

I believe if you go through an IFA you can take out one from as low as two years.

https://www.youtube.com/watch?v=RIq6HjvgC0o

Yes, i like the idea of this if i can do a 3 year option. I will investigate further. 
Using Canada Life, if i put in £266,000 over 5 years it pays out 14,000 each month. At the end of the 5 years i will get the £266,000 back to do with as i please. That is attractive to me, removing that uncertainty while the world comes to its senses!
Thanks

I think paying out £14k a month would be attractive to anyone :-)

BoxerfanUK

Spivo46 said:

BoxerfanUK said:

I don't fancy the idea of a 'lifetime' annuity but something I and my OH have been looking into for her (and still researching) is a 'fixed term' annuity.  In her case, a rough quote based on a 462k pot for a 5 year fixed income of 12,570 pa and after 5 years a guaranteed maturity sum back of 535K to either buy another annuity or put into a SIPP for drawdown.  5.45% annual return guaranteed for 5 years and no need to worry about what the equity or bond markets do for 5 years!!  I keep thinking it seems to good to be true but........!!!!

I believe if you go through an IFA you can take out one from as low as two years.

https://www.youtube.com/watch?v=RIq6HjvgC0o

Yes, i like the idea of this if i can do a 3 year option. I will investigate further. 
Using Canada Life, if i put in £266,000 over 5 years it pays out 14,000 each month. At the end of the 5 years i will get the £266,000 back to do with as i please. That is attractive to me, removing that uncertainty while the world comes to its senses!
Thanks

Yes, Canada life seems to be one of the top payers, although I have also read that IFA’s can often get better rates and fixed annuities as low as two year terms.