Legal and General Flexi-Access Drawdown

Doonhamer

I have a workplace pension with L&G and was considering the option to leave it with them when I retire and enter into a flexi-access drawdown. I'm just looking through some of their literature and I came across this.

If you don’t take the full 25% when you set up your plan, our product
doesn’t currently allow you to take the tax-free allowance later.
The remaining pot will be taxable when you choose to take it.

Other providers may let you access your tax-free cash in stages.

Am I right in concluding that L&G don't provide a phased drawdown which is what I was looking to arrange?

ali_bear

Flexible access drawdown is a relatively recent innovation and some older policies (pre 2015?) won't allow for it. I am in this position so will probably move my pension into a SIPP when the time comes to start drawing down. Very possibly L&G will offer a SIPP?

dunstonh

Am I right in concluding that L&G don't provide a phased drawdown which is what I was looking to arrange?

in this case, they are saying they don't support regular UFPLS or phasing of the taking of the 25%.

Not unexpected, in my experience, you transfer L&G plans to alternatives most of the time.  Just be on guard that L&G are a right pain in the neck when it comes to transfers.   They have a very small green list for providers/platforms or investments which means they often force the anti-scam process right through to requiring a moneyhelper meeting.   Its worth allowing 3-6 months in your timing if you move L&G pensions.  Unlike the 3-10 days it typically takes with most others.

gm0

I run one part of my pension in L&G Workplace (Pension Access Scheme) moved from an older non-drawdown L&G occupational trust for drawdown.   About 3 years now.

I dealt with phasing by moving only the lump I wanted to into it.  Partial transfer. And others elsewhere.  It works. 

It was and is cheap for me - the scheme specific platform fee with drawdown support.  Fund costs are par for the course. Passive selection does what is needed.  Several multi-assets of variable attraction.  Active - it's just not the place for that.

I used FAD (for the chunk that went in).  And set monthly income.  It's part of my passive core holding.

It is all 100% FSCS protection - insured funds per the prior L&G occupational.  A minor difference but it's there.

Double the fund selection from prior scheme in house L&G bar a guest Threadneedle still not many.

Corporate scheme admin linked bolts on drawdown (at L&G) via master trusts.  So it is a transfer (bulk or individual) into it.  Each one has agreed with particular trustees scheme fund lists which are similar. 
Prices at scheme may also reflect bidding the contract, history of scheme and size etc.

I have residual pension at L&G - and so have to deal with them anyway.  It was not difficult for me to at least try them out for one of the drawdown sections to see how well it worked. I would not be leaving entirely anyway.

I would not have picked them as the sole target for my pension.  Fund selection is the main thing driving that. 

On it - for passive - I use World ex UK index and UK index quite a lot.  It scarcely matters where they live.  Same price around 0.10/0.12 across providers and they track - that's the point.

Digital is beyond archaic. 

I can now see my old occupational and workplace together under a login to keep an eye on things but can't do much.  Fact sheets updated from time to time.  Limited performance data.  They do not hound me with guidance or marketing. So a point in their favour. 

If you want decent digital channel self service facilities and just trade yourself with limit orders. You NEED to transfer elsewhere.  It will be misery.  I also do my flexible trading on another platform with a wider selection of funds. 

When I simplify and consolidate pension platforms again later - this one will not be the target.  It will get tidied away.

But it's all about intended use.  If you setup an asset allocation for deaccumulation, set a monthly income and leave it for 12-18 months at a time. From crystallised funds post TFC. For rebalancing.  Then their quaint little methods may not offend you so much.  

All the people I have actually dealt with have been friendly and good attitude.  Speaks well of culture. 

A bit hampered by process lack of visibility and workflows they are told to follow.  More regulation and risk input to processes than customer experience focus.

Doonhamer

I messaged them, they say I can phase tax free cash, not via Flexi Access Drawdown, but by taking a partial lump sum and the first 25% is tax-free. I assume that's then UFPLS? But they are also saying that I have a scheme specific Protected Tax Free Cash entitlement and that if I take a Partial Tax Free Lump Sum or transfer out I could lose this entitlement, it's not a lot makes it 26%. I only need to take a small amount the first three years to use up my tax allowance, about 1.5% as I have a DB PCLS and other savings to use first. Crazy it's so hard to take a tiny amount. Probably need to pay an adviser now, likely cost more than I'm taking out initially

dunstonh

I messaged them, they say I can phase tax free cash, not via Flexi Access Drawdown, but by taking a partial lump sum and the first 25% is tax-free. I assume that's then UFPLS?

That is UFPLS.    

But they are also saying that I have a scheme specific Protected Tax Free Cash entitlement and that if I take a Partial Tax Free Lump Sum or transfer out I could lose this entitlement, it's not a lot makes it 26%

At 26% its not an issue if its lost.  You could take the 26% TFC in full and put unwanted TFC into an S&S ISA (over multiple years if necessary by using a GIA for anything over £20,000 - or use spouse if there is one).   One you have taken the 26% TFC, you can then transfer the crystallised fund to an alternative provider with more functionality.

 Crazy it's so hard to take a tiny amount.

Basic product offering basic options.    You want something with more functionality.  So, you move to that and use the workarounds above.