Private pension

Blueallblueno9

I have 20k left in a private pension pot. 
Its roughly making about a grand a year
However it cost 1% to manage it and if I cash it in that's another 21%.
I was wondering if I'd be better off cashing it in and putting it into an account I have that pays 4.5%.

Dazed_and_C0nfused

Blueallblueno9 said:

I have 20k left in a private pension pot. 
Its roughly making about a grand a year
However it cost 1% to manage it and if I cash it in that's another 21%.
I was wondering if I'd be better off cashing it in and putting it into an account I have that pays 4.5%.

What is this 21% you speak of 🤔

Blueallblueno9

IvanOpinion said:

Could you move it to somewhere that isn't costing you 1% per year to manage it?
Can we assume that you have other income that takes you above your personal allowance levels?
Have you already taken the 25% tax free out of this pot?

Yes I have taken my tax free amount few years back. 
Yes I have an account I'm currently getting 4.5% but I don't know how to work out what's best I. E leave it or move it.? 

Blueallblueno9

Dazed_and_C0nfused said:

Blueallblueno9 said:

I have 20k left in a private pension pot. 
Its roughly making about a grand a year
However it cost 1% to manage it and if I cash it in that's another 21%.
I was wondering if I'd be better off cashing it in and putting it into an account I have that pays 4.5%.

What is this 21% you speak of 🤔

Tax is 21%

TheSpectator

Blueallblueno9 said:

Dazed_and_C0nfused said:

Blueallblueno9 said:

I have 20k left in a private pension pot. 
Its roughly making about a grand a year
However it cost 1% to manage it and if I cash it in that's another 21%.
I was wondering if I'd be better off cashing it in and putting it into an account I have that pays 4.5%.

What is this 21% you speak of 🤔

Tax is 21%

Are you in Scotland?

Cobbler_tone

Another way to look at it. What is your growth rate on the £20k vs your 1% fee, considering it is growing tax free?

Totally depends if you need/want the cash in your bank/to spend. Assuming you have other income over the basic tax threshold you are going to pay tax on it at some point if you want your hands on it.

dunstonh

However it cost 1% to manage it and if I cash it in that's another 21%.
I was wondering if I'd be better off cashing it in and putting it into an account I have that pays 4.5%.

You do realise that the charges on the savings account paying 4.5% are likely to be higher than 1% a year?   
One is explicit, the other is implicit.  i.e. one you are told what they are and the other you are not.

Tax is 21%

Are we to assume you are in Scotland?  If so, you should state as much as the majority of people in the UK are not paying 21%.

Yes I have an account I'm currently getting 4.5% but I don't know how to work out what's best I. E leave it or move it.? 

So, your pension is making over 5% a year after charges and you want to know if its better to draw the pension, lose 21% of its value in tax to pay it in a savings account that is paying 4.5% currently after charges (but expected to drop over the next few years)?

Blueallblueno9

This might help and hopefully is OK to post. 

Blueallblueno9

dunstonh said:

However it cost 1% to manage it and if I cash it in that's another 21%.
I was wondering if I'd be better off cashing it in and putting it into an account I have that pays 4.5%.

You do realise that the charges on the savings account paying 4.5% are likely to be higher than 1% a year?   
One is explicit, the other is implicit.  i.e. one you are told what they are and the other you are not.

Tax is 21%

Are we to assume you are in Scotland?  If so, you should state as much as the majority of people in the UK are not paying 21%.

Yes I have an account I'm currently getting 4.5% but I don't know how to work out what's best I. E leave it or move it.? 

So, your pension is making over 5% a year after charges and you want to know if its better to draw the pension, lose 21% of its value in tax to pay it in a savings account that is paying 4.5% currently after charges (but expected to drop over the next few years)?

Thanks. 
I am not aware I pay any charges on my account paying 4.5% Tandem.

Yes sorry I should have said Scotland it's my 1st time posting so be gentle. 
I'm always going to loose the 21% no matter when I cash it in.
However the more it grows the greater amount that's going to be, hence my reason for asking. 

Blueallblueno9

TheSpectator said:

Blueallblueno9 said:

Dazed_and_C0nfused said:

Blueallblueno9 said:

I have 20k left in a private pension pot. 
Its roughly making about a grand a year
However it cost 1% to manage it and if I cash it in that's another 21%.
I was wondering if I'd be better off cashing it in and putting it into an account I have that pays 4.5%.

What is this 21% you speak of 🤔

Tax is 21%

Are you in Scotland?

Yes. 
Sorry I should have said. 

AlanP_2

Blueallblueno9 said:

dunstonh said:

However it cost 1% to manage it and if I cash it in that's another 21%.
I was wondering if I'd be better off cashing it in and putting it into an account I have that pays 4.5%.

You do realise that the charges on the savings account paying 4.5% are likely to be higher than 1% a year?   
One is explicit, the other is implicit.  i.e. one you are told what they are and the other you are not.

Tax is 21%

Are we to assume you are in Scotland?  If so, you should state as much as the majority of people in the UK are not paying 21%.

Yes I have an account I'm currently getting 4.5% but I don't know how to work out what's best I. E leave it or move it.? 

So, your pension is making over 5% a year after charges and you want to know if its better to draw the pension, lose 21% of its value in tax to pay it in a savings account that is paying 4.5% currently after charges (but expected to drop over the next few years)?

Thanks. 
I am not aware I pay any charges on my account paying 4.5% Tandem.

Yes sorry I should have said Scotland it's my 1st time posting so be gentle. 
I'm always going to loose the 21% no matter when I cash it in.
However the more it grows the greater amount that's going to be, hence my reason for asking. 

Well yes the more it grows the more tax you will pay but also the more you would have left to spend 

Would you rather have 79% after tax from a £20k pot (£15,800) or from a £30k pot (£23,700)?

Or looking at it another way would you be happier if you'd pot halved in value so you only paid tax on £10k?

Don't let the tax tail wag the dog.

Do you need the cash in your bank account to spend now?

If not why withdraw it now?

Look at cheaper options if you feel 1% is too high a fee, going DIY on a platform like A J Bell and allowing for a mixed equity/bond fund like one from the HSBC Global Strategy range you could probably get fees down to about 0.5%.