SIPP minimum balance

eastcorkram

Just wondering if anyone has come across this. I have a small sipp with Fidelity. As I'm no longer working, I thought I'd tie up this loose end, before I start three other pensions , two in  December, and one next April. 

So, I wanted to take 25% tfls, and then the rest monthly if possible until it's empty. It says I can do this online, but when you start that process, there are a number of conditions you have to meet. You must be over 55. Must have considered pensionwise etc etc. I pass on all of the conditions, except one that states, you must have at least £10,000 in the SIPP. 

Mine is just over £9,000. I called them today. Got through fairly quickly, then once I'd explained, he said he didn't know how to resolve that, but he'd put me through to someone who could. Anyway, one hour later, still on hold, so gave up. The guy did keep coming back to me every ten minutes or so, to see if I was still there. 

Do I really need to pay in more, before I'm allowed to draw any out? 

The £9,000 is not invested, it's just a cash balance. 

Marcon

eastcorkram said:

Just wondering if anyone has come across this. I have a small sipp with Fidelity. As I'm no longer working, I thought I'd tie up this loose end, before I start three other pensions , two in  December, and one next April. 

So, I wanted to take 25% tfls, and then the rest monthly if possible until it's empty. It says I can do this online, but when you start that process, there are a number of conditions you have to meet. You must be over 55. Must have considered pensionwise etc etc. I pass on all of the conditions, except one that states, you must have at least £10,000 in the SIPP. 

Mine is just over £9,000. I called them today. Got through fairly quickly, then once I'd explained, he said he didn't know how to resolve that, but he'd put me through to someone who could. Anyway, one hour later, still on hold, so gave up. The guy did keep coming back to me every ten minutes or so, to see if I was still there. 

Do I really need to pay in more, before I'm allowed to draw any out? 

The £9,000 is not invested, it's just a cash balance. 

That £10K sounds very much like the upper limit for a withdrawal under the 'small pots' regime. I wonder if the 'minimum investment' is there to ensure that anyone who could qualify for taking their pot as a 'small pot' has to contact Fidelity before any withdrawal can proceed, giving Fidelity the chance to ensure that the customer is aware of that option? Sounds plausible, although I'd be more confident my guess was correct if someone you'd spoken to had been aware of that as a possible explanation.

DRS1

Maybe they have special procedures for small pots (under £10k) such as wanting you to take it all in one go?

Notepad_Phil

I think Marcon and DRS1 are right - the Fidelity help text says that you need to contact their retirement service if your pot is less than £10,000 and it appears from google that if you go through them then taking it under small pots is an option.

There are some other pages which talk about having £50,000 to go into full drawdown (which is what you want), so if that is the option that you really want and Fidelity won't allow it then you might need to consider transferring your pot elsewhere - perhaps Hargreaves Lansdown might be a possibility for you. I'm sure I've read posts on here about people putting their £3600 pots into drawdown with them, so I would have thought that your £9000 would be fine - but you should confirm that with Hargreaves.

Albermarle

There are some other pages which talk about having £50,000 to go into full drawdown 

I think this a restriction on pension pots that are transferred to Fidelity, not on existing pots.

I called them today. Got through fairly quickly, then once I'd explained, he said he didn't know how to resolve that, 

I would message them in writing.

eastcorkram

Albermarle said:

There are some other pages which talk about having £50,000 to go into full drawdown 

I think this a restriction on pension pots that are transferred to Fidelity, not on existing pots.

I called them today. Got through fairly quickly, then once I'd explained, he said he didn't know how to resolve that, 

I would message them in writing.

I've done that now. We'll see what they say. I can do either of the things mentioned above, no problem. Transfer to my HL sipp, or just take it all now. I imagine with that though, it will have too much tax deducted, as it doesn't currently have a tax code. Then I should be able to reclaim some, or all of it I guess. I've no idea how long that may take . 

Notepad_Phil

eastcorkram said:

Albermarle said:

There are some other pages which talk about having £50,000 to go into full drawdown 

I think this a restriction on pension pots that are transferred to Fidelity, not on existing pots.

I called them today. Got through fairly quickly, then once I'd explained, he said he didn't know how to resolve that, 

I would message them in writing.

I've done that now. We'll see what they say. I can do either of the things mentioned above, no problem. Transfer to my HL sipp, or just take it all now. I imagine with that though, it will have too much tax deducted, as it doesn't currently have a tax code. Then I should be able to reclaim some, or all of it I guess. I've no idea how long that may take . 

I think if you are able to take it using small pot rules then the 75% taxable part of it is taxed at basic rate 20%, so possibly won't be so much of an issue for you? See https://www.litrg.org.uk/pensions/pension-withdrawals/small-pensions for more details.

LHW99

Notepad_Phil said:

eastcorkram said:

Albermarle said:

There are some other pages which talk about having £50,000 to go into full drawdown 

I think this a restriction on pension pots that are transferred to Fidelity, not on existing pots.

I called them today. Got through fairly quickly, then once I'd explained, he said he didn't know how to resolve that, 

I would message them in writing.

I've done that now. We'll see what they say. I can do either of the things mentioned above, no problem. Transfer to my HL sipp, or just take it all now. I imagine with that though, it will have too much tax deducted, as it doesn't currently have a tax code. Then I should be able to reclaim some, or all of it I guess. I've no idea how long that may take . 

I think if you are able to take it using small pot rules then the 75% taxable part of it is taxed at basic rate 20%, so possibly won't be so much of an issue for you? See https://www.litrg.org.uk/pensions/pension-withdrawals/small-pensions for more details.

Also, don't the small pot rules avoid triggering the MPAA?

Notepad_Phil

LHW99 said:

Notepad_Phil said:

eastcorkram said:

Albermarle said:

There are some other pages which talk about having £50,000 to go into full drawdown 

I think this a restriction on pension pots that are transferred to Fidelity, not on existing pots.

I called them today. Got through fairly quickly, then once I'd explained, he said he didn't know how to resolve that, 

I would message them in writing.

I've done that now. We'll see what they say. I can do either of the things mentioned above, no problem. Transfer to my HL sipp, or just take it all now. I imagine with that though, it will have too much tax deducted, as it doesn't currently have a tax code. Then I should be able to reclaim some, or all of it I guess. I've no idea how long that may take . 

I think if you are able to take it using small pot rules then the 75% taxable part of it is taxed at basic rate 20%, so possibly won't be so much of an issue for you? See https://www.litrg.org.uk/pensions/pension-withdrawals/small-pensions for more details.

Also, don't the small pot rules avoid triggering the MPAA?

Yes it does, though it's probably not as useful for the OP as they say they've stopped work.

eastcorkram

Notepad_Phil said:

LHW99 said:

Notepad_Phil said:

eastcorkram said:

Albermarle said:

There are some other pages which talk about having £50,000 to go into full drawdown 

I think this a restriction on pension pots that are transferred to Fidelity, not on existing pots.

I called them today. Got through fairly quickly, then once I'd explained, he said he didn't know how to resolve that, 

I would message them in writing.

I've done that now. We'll see what they say. I can do either of the things mentioned above, no problem. Transfer to my HL sipp, or just take it all now. I imagine with that though, it will have too much tax deducted, as it doesn't currently have a tax code. Then I should be able to reclaim some, or all of it I guess. I've no idea how long that may take . 

I think if you are able to take it using small pot rules then the 75% taxable part of it is taxed at basic rate 20%, so possibly won't be so much of an issue for you? See https://www.litrg.org.uk/pensions/pension-withdrawals/small-pensions for more details.

Also, don't the small pot rules avoid triggering the MPAA?

Yes it does, though it's probably not as useful for the OP as they say they've stopped work.

Yes. Stopped work. Not really planning on making any pension contributions in the future, unless I just do the £2880 thing or whatever the figure is. 

Still waiting for Fidelity to respond. If I've still heard nothing by tomorrow, I'll try calling again. 

eastcorkram

After waiting a week for them to respond via message, and they hadn't, I rang again today. Was then put through to the correct department. They've arranged a phone meeting for next Tuesday. What was said today was, there's basically two options.

 Take all of it out, 25% tax free, and the rest all taxed at 20%. 

OR

Take all of it, 25% tax free, and the rest subject to emergency tax. 

Will see what is said next week, but that did leave me wondering why would anyone choose the second option.