Do I really need an IFA to draw my pension?

Ibrahim5

All Pension wise do is tell you how to take money from a DC pension and the tax implications so it sounds pretty perfect. It would be interesting to see if the OP could actually get an IFA interested. They often have a receptionist on the desk taking details. They would giggle a bit about being unemployed but when they hear you have £200k that maybe they could take a few £k off you they might get interested. If there's no way of getting a few thousand they won't waste their time with you.

FIREDreamer

dunstonh said:

Now I'm even more confused. At the start of this thread most people were saying yes I need to take advice. Now it's the opposite vibe. That IFAs are just lining their own pocket and the value is questionable. 

One poster who is so anti-IFA that the regulars have him on ignore or yawn at his posts, should not be taken 

Didn’t know you could ignore people. Just worked out how to do it. One less antiIFA troll to deal with. He probably works for SJP. 😂😂😂

Ibrahim5

It's up to you, but you will be missing out on the most up to date information from the most authoritative source of IFA behaviour information on the MSE forum.

Bostonerimus1

quantum said:

Now I'm even more confused. At the start of this thread most people were saying yes I need to take advice. Now it's the opposite vibe. That IFAs are just lining their own pocket and the value is questionable. 
I hope Pensionwise can help me in a couple of hours.
In my very unknowledgeable head I have money invested in whatever with my current Pensions. There's the various options to draw on them as part of all. What's the point of an IFA in this scenario? I just need to make a decision on...
My biggest pot options...
1. Max cash sum and reduced Pension
2. Annual Pension, no Cash lump
2a. Max Cash Sum and additional bridging pension payable till State Pension Date (I'm 62 and therefore it's 67).
2b An additional bridging pension payable till SPD and no cash sum
3. Transfer Value

IFAs are business people and you need to find one who does a good job for a fair price if you don't want to DIY. If you are relatively literate and have a basic grasp of maths that includes compound interest then you can probably DIY, but what is often lacking is self-confidence. The financial industry has a vested interest in making managing finances seem complicated and far too many people still think that picking the right stock or fund that grows 100 fold is the way to succeed - it isn't. Just invest in a few index tracker funds and do that for 40 years and you will probably be ok and save a load of money on IFA fees. 

In your situation the right IFA might actually be useful as drawdown is probably the most complex part of retirement, although manageable by anyone with a grasp of probability.

kempiejon

Bostonerimus1 said:

In your situation the right IFA might actually be useful as drawdown is probably the most complex part of retirement, although manageable by anyone with a grasp of probability.

I found that, jiggling between DB an DC lumps sums, annuities, UFPLS, tax threshold, asset allocation and seuence of returns was a change in mind set from my focus on accumulating to pre retrement income planning. A new set of knowledge.

Bostonerimus1

kempiejon said:

Bostonerimus1 said:

In your situation the right IFA might actually be useful as drawdown is probably the most complex part of retirement, although manageable by anyone with a grasp of probability.

I found that, jiggling between DB an DC lumps sums, annuities, UFPLS, tax threshold, asset allocation and seuence of returns was a change in mind set from my focus on accumulating to pre retrement income planning. A new set of knowledge.

Asset allocation and tracking your investments is still important in retirement, but there are the added layers of income generation, taxation, expected mortality and maybe inheritance to consider.

Bostonerimus1

Ibrahim5 said:

All Pension wise do is tell you how to take money from a DC pension and the tax implications so it sounds pretty perfect. It would be interesting to see if the OP could actually get an IFA interested. They often have a receptionist on the desk taking details. They would giggle a bit about being unemployed but when they hear you have £200k that maybe they could take a few £k off you they might get interested. If there's no way of getting a few thousand they won't waste their time with you.

I'm not quite as cynical as you as I still believe there are actually some IFAs out there looking to provide a service at a reasonable cost...the trick is to find one. I think everyone would advise against an FA or using a company like SJP. I DIY my finances, but did pay a lawyer to do my estate planning as it was a one time charge and I wanted to get the trust right. So I see that an IFA might be a necessary evil for some people.

wjr4

Qyburn said:

Cobbler_tone said:

So in a nutshell, there is absolutely no way of knowing if a small IFA is going to do a good job for you? 

That was what put us off. All we knew is that they typically wanted a 3% fee for reviewing our pensions, saving and drawing up a retirement plan. Plus some confident waffle about us saving at least that much in tax. It's a shame they don't offer staged advice, initially explanatory discussions for a few hundred (or even a couple of thousand) so you can see how you get on. Rather than having to blindly chuck nearly £20k to them and hope it works out well.

Find a company that charges a fixed fee based on the work, not a percentage, especially not a percentage without a cap! 

wjr4

quantum said:

My biggest pot options...
1. Max cash sum and reduced Pension
2. Annual Pension, no Cash lump
2a. Max Cash Sum and additional bridging pension payable till State Pension Date (I'm 62 and therefore it's 67).
2b An additional bridging pension payable till SPD and no cash sum
3. Transfer Value

That’s a defined benefit pension. 

quantum

wjr4 said:

Qyburn said:

Cobbler_tone said:

So in a nutshell, there is absolutely no way of knowing if a small IFA is going to do a good job for you? 

That was what put us off. All we knew is that they typically wanted a 3% fee for reviewing our pensions, saving and drawing up a retirement plan. Plus some confident waffle about us saving at least that much in tax. It's a shame they don't offer staged advice, initially explanatory discussions for a few hundred (or even a couple of thousand) so you can see how you get on. Rather than having to blindly chuck nearly £20k to them and hope it works out well.

Find a company that charges a fixed fee based on the work, not a percentage, especially not a percentage without a cap! 

Yes that would be good. Not sure on £70k who'd be interested...