One year before drawdown - crazy to move SIPP (from LifeSight)?

TimeToEatCake

I've had some really useful comments on a post I made on Monday asking for advice around unplanned early retirement.  I'm still modelling / researching exactly how and how much I am going to move from global equity index trackers in my SIPP to bonds but I took a look at my LifeSight SIPP yesterday and it's sadly lacking to the point where I am considering whether I should change provider.

I have £645k in total in two SIPPs that I want to start drawing at least £16,760 from once I turn 55 in a year's time.  £525k of this is with LifeSight.   The (potential) problem is that LifeSight has a really minimal range of funds and only a couple of bond funds (no global governments for example).  I was also planning to move my equity funds (or some) from accumulation to income but LifeSight has no income funds!  They've been completely fine in growth phase - my investments have performed well over the years and fees are ultra-low.  But now I need more from them as I will (hopefully!) be retired a long time.  They also don't have a great reputation and when I transferred in a small fund when my former employer moved the scheme to LifeSight, they were terrible!  The money took ages to go into my fund (at least two weeks after the previous provider notified that the transfer was complete); communication was non-existent and responses to queries were poor and slow. Not sure if they are better with transfers out.

I have a concern too that my fund will be out of the market (think that LifeSight funds, whilst managed by LGIM, are bespoke so no option to move "in specie").  I think this might be too much of a risk given the size of my fund and the proximity to drawdown (although I can drawdown from my other SIPP with HL to start with) so I should probably make LifeSight work however I can.

Any thoughts?  @leosayer and @artyboy -  I have seen you both post about LifeSight previously and wondered if your opinions have changed.

Thanks!

    

Albermarle

Personally I think in drawdown you would be better with a more flexible and responsive provider.
The 'time out of the market' issue can not be avoided, but remember you could be in drawdown for 30 years or more, so any effect will be greatly diluted.
Also to avoid an increase in charges ( if they are really low now?) you will need to research carefully where you move to, and what investments you would hold. They all seem to have different charging structures.
It might help to know that some pension providers offer cashbacks for transfers in from time to time.
The only active one I am aware of is this one, but there may be others.
Pension Transfer | SIPP Transfer | Transfer Pension to SIPP

AlanP_2

You can further dilute the time out of market risk by moving across in tranches rather than all in one go if both providers can cope with that.

TimeToEatCake

Thanks Both.  Think I'll be brave and gorgeous for it once I've researched the most suitable provider to move to.

TimeToEatCake

Brave and go for it not gorgeous!!!!

QrizB

TimeToEatCake said:

Brave and go for it not gorgeous!!!!

You can be as gorgeous as you want, and don't let anyone ever tell you that you can't!

dunstonh

t I took a look at my LifeSight SIPP yesterday and it's sadly lacking to the point where I am considering whether I should change provider.

I wasnt aware Lifesight offered a SIPP.    Are you sure its a SIPP?  

The (potential) problem is that LifeSight has a really minimal range of funds and only a couple of bond funds (no global governments for example).  

SIPPs typically have around 20k-30k of investment options.  

I have a concern too that my fund will be out of the market (think that LifeSight funds, whilst managed by LGIM, are bespoke so no option to move "in specie"). 

If it was a SIPP, you could use in-specie transfers.  However, it appears it is not, so you cannot.

TimeToEatCake

Yes, you're right @dunstonh.  My mistake.  It's a workplace pension - I had used SIPP in error because I choose how it's invested but I can only choose from a very narrow range of investment options.  

Hoenir

Presumably they've a range of investment options. Rather than the default that's recommended for most people. You've opted for the most adventurous/aggressive option. There's no reason why you couldn't switch to a lower risk option while you mull over your options. 

TimeToEatCake

Hoenir said:

Presumably they've a range of investment options. Rather than the default that's recommended for most people. You've opted for the most adventurous/aggressive option. There's no reason why you couldn't switch to a lower risk option while you mull over your options. 

No, you can choose either to have your pension lifestyled or you can "freestyle" which means you choose your own funds from a limited range, eg US Equity, Europe Equity, Gilts, Property etc.   I "freestyle" and have chosen my own from the range.

If I had lifestyled I would currently be invested 100% in a diversified growth fund which has mixture of Equity and Bonds.   This fund is also available as a fund choice for those who "freestyle" and I may switch a % of my 100% equity funds to this short term while I research a new provider.

Scrudgy

I have just completed a pension transfer from Lifesight to Interactive Investor. Although the process took 2 months in total, most of that was behind the scenes admin and security checking and rule checking. 

Once WTW Lifesight agreed that my transfer was compliant with the rules, they notified me that my assets would be disinvested. The total time from the disinvestment until Interactive Investor received the cash was 5 days. So not out of the market for long.