SIPP vs DB early and drawdown charges

k6chris

Hi all, I am 60 and retired with a company DB pension which is covering my basic costs.  I also have a SIPP with iWEB which has the DC part of my employers pension.  Finally I have a small LGPS pension (5 years employment).  To increase my income I am considering either drawing my LGPS pension early or drawing down on my SIPP.  Two questions:

LGPS early or SIPP drawdown? Why??

With iWeb the annual fee for Flexi-access drawdown is £180 per annum.  Is that reasonable or is there a significantly better option for SIPP drawdown?  (Happy with iWeb so far)

Thanks all

Linton

What is the size of your DC pot? a fixed charge is better for large pots, but not so good for small ones. A £180 increase above a basic SIPP charge for drawdown seems higher than most but other companies may well charge more for the basic option. II for example charge £12.99/month for a SIPP with no extra charge for drawdown. Then there are transaction charges to compare.

LHW99

How many years early for the LGPS, and what is the reduction for doing so?

Maybe you could compromise by taking just the tax-free amount from the DC and use that to live on for a year or two. Thereby lowering the reduction for taking the DB early, and (maybe) not paying actual drawdown charges (I don't know iWeb's charges structure so can't be definate on that).

Albermarle

Basically iweb are super cheap/almost free when just accumulating a pension. So inevitably they have extra charges for some actions.
Other providers charge more when accumulating the pension, but do not charge extra for drawdown.

k6chris

Thanks all.  Looking at options, Interactive Investors charge £12.99 x 12 months (£156 pa) charges and no additional charges for drawdown.  iWeb charge £45 x 4 qts (£180pa) and and additional £180pa for drawdown.  I am not a frequent trader, maybe 2-3 trades per year to rebalance.  Unless I am missing something it would make sense to transfer my SIPP to ii?  Any gotchas in doing this?  Any experience??  Thanks

zagfles

On your other question, taking LGPS early looks like a bad deal, unless you have short life expectancy etc. See

Taking your pension :: LGPS (lgpsmember.org)

LHW99

Looks like ii have a transfer offer at the moment

https://www.ii.co.uk/ii-accounts/sipp

Albermarle

k6chris said:

Thanks all.  Looking at options, Interactive Investors charge £12.99 x 12 months (£156 pa) charges and no additional charges for drawdown.  iWeb charge £45 x 4 qts (£180pa) and and additional £180pa for drawdown.  I am not a frequent trader, maybe 2-3 trades per year to rebalance.  Unless I am missing something it would make sense to transfer my SIPP to ii?  Any gotchas in doing this?  Any experience??  Thanks

It depends on the size of the pot, which you have not mentioned. A fixed fee provider like II, is more suited to pots > £100K .
For smaller pots a provider charging a % of the fund usually works out better, although the exact cut off point will vary.
Also it matters whether you are invested in OEIC funds ( most people are ) or not. 

k6chris

Albermarle said:

k6chris said:

Thanks all.  Looking at options, Interactive Investors charge £12.99 x 12 months (£156 pa) charges and no additional charges for drawdown.  iWeb charge £45 x 4 qts (£180pa) and and additional £180pa for drawdown.  I am not a frequent trader, maybe 2-3 trades per year to rebalance.  Unless I am missing something it would make sense to transfer my SIPP to ii?  Any gotchas in doing this?  Any experience??  Thanks

It depends on the size of the pot, which you have not mentioned. A fixed fee provider like II, is more suited to pots > £100K .
For smaller pots a provider charging a % of the fund usually works out better, although the exact cut off point will vary.
Also it matters whether you are invested in OEIC funds ( most people are ) or not. 

Just under £200k and no OEIC funds.  Thanks

Albermarle

k6chris said:

Albermarle said:

k6chris said:

Thanks all.  Looking at options, Interactive Investors charge £12.99 x 12 months (£156 pa) charges and no additional charges for drawdown.  iWeb charge £45 x 4 qts (£180pa) and and additional £180pa for drawdown.  I am not a frequent trader, maybe 2-3 trades per year to rebalance.  Unless I am missing something it would make sense to transfer my SIPP to ii?  Any gotchas in doing this?  Any experience??  Thanks

It depends on the size of the pot, which you have not mentioned. A fixed fee provider like II, is more suited to pots > £100K .
For smaller pots a provider charging a % of the fund usually works out better, although the exact cut off point will vary.
Also it matters whether you are invested in OEIC funds ( most people are ) or not. 

Just under £200k and no OEIC funds.  Thanks

Some providers that charge a % , have caps on fees for ETF's, shares and Investment Trusts.
HL - £200
Fidelity - £90
AJ Bell - £120

ColdIron

k6chris said:

Albermarle said:

k6chris said:

Thanks all.  Looking at options, Interactive Investors charge £12.99 x 12 months (£156 pa) charges and no additional charges for drawdown.  iWeb charge £45 x 4 qts (£180pa) and and additional £180pa for drawdown.  I am not a frequent trader, maybe 2-3 trades per year to rebalance.  Unless I am missing something it would make sense to transfer my SIPP to ii?  Any gotchas in doing this?  Any experience??  Thanks

It depends on the size of the pot, which you have not mentioned. A fixed fee provider like II, is more suited to pots > £100K .
For smaller pots a provider charging a % of the fund usually works out better, although the exact cut off point will vary.
Also it matters whether you are invested in OEIC funds ( most people are ) or not. 

Just under £200k and no OEIC funds.  Thanks

HL would charge nearly half for that at £200. IWeb are great for ISAs and GIAs, less so for SIPPs

Fidelity could be worth a look, £90 fee cap

https://monevator.com/compare-uk-cheapest-online-brokers