Do I have to pay a fortune to get a small pension sorted?!

Marcon

kr56 said:

Marcon said:

kr56 said:

Hi all.  I have less than £70,000 in combined pensions and am trying to find the simplest, most trustworthy, cost effective way to get at it.  Most IFAs seem to charge a large chunk of whatever I will get. I know they have to be paid for their expertise but to be honest I think most of it comes from an automated system these days.  I dont want anything fancy, and I dont have a 'portfolio'!! I wish!  Any suggestions please as to how I can go about doing this?

A free chat with PensionWise might be no bad starting point, if only to get your head round the basic options and the jargon. https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

You seem to be making something pretty basic into something needlessly complex. Is there some important info missing, such as you are no longer a UK resident and you have pensions where an adviser has to be involved as an intermediary before you can access the loot?

Thats kinda my point. It does seem needlessly complex and expensive going by what IFAs say. On the other hand I cant get anyone to just answer in simple terms.  

Answer what, exactly? If you look on the provider's website or read the literature in relation to your schemes, it will give you the options.

kr56 said:

ooh, interesting thought! Now you see nobody has mentioned SIPPs!  Its 2 pensions, 60k plus 10k roughly, DC. At a very basic level I want the tax free sum plus a monthly income. This for immediate access as I am already retired.

So what's stopping you from doing that? Does the larger of the two pensions have any sort of 'promise' (eg a guaranteed annuity rate), which could mean you are required to receive advice?

Maybe combine the two and take 25% tax free cash and use the balance to buy an annuity (monthly income); or use 'phased drawdown' - explained here: https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/what-is-flexible-retirement-income-pension-drawdown

If these are quite old pensions they may not support phased drawdown, but you should be able to move them to a  modern contract without too much difficult - that's a DIY job (unless there are safeguarded benefits, as I've just mentioned - in which case you have to receive advice where the pot has a value of at least £30K).

dunstonh

ooh, interesting thought! Now you see nobody has mentioned SIPPs!  

Why would anyone mention a SIPP?
What type of SIPP? - full functionality, platform SIPP, pretend SIPP (marketed as one despite having little or no SIPP functionality....)

Do you want or need a SIPP?

Why SIPP and not a PPP?  Why not an annuity?  
Do you have significant other savings and investments that make using drawdown in retirement viable or would annuity be the safer option?

Albermarle

kr56 said:

singhini said:

No you don't have to pay a fortune, but we need more information to be better placed to help you.

£70,000 in combined pensions -----> more detail please (how many pensions? currently value of each pension? which type of pensions are they i.e. DB or DC?

You said "get at it"  -----> what do you mean, do you want to start taking your pension? if so, do you want an annuity or do you want to take lump sums? and if its take lump sums, is it on a regular basis with a fix amount each month or occasionally take money? Or do you want to "get at it" and put it all into one pot? and if so, what are your plans thereafter?

How old are you? when do you want to retire? are your currently working? 

Its easy for me to say to you, open a SIPP and transfer all the DC pension into it (holding it as cash) and hopefully the SIPP pays interest on cash balances. Then make sure the SIPP provider has your correct tax code and then ask then for £16,760 (making sure they give you 25% of this tax free i.e. £4,190 and the remaining £12,570 you receive on a monthly basis of £1,047.50p thus you have paid no tax [caveat: aslong as you have no other income]. If you have any DB pensions, just leave them. PS: remember to stick £240 back into the SIPP each month as it will earn £60 in the form of tax relief.
This is what im doing but it might not be the right thing for you!

singhini said:

No you don't have to pay a fortune, but we need more information to be better placed to help you.

£70,000 in combined pensions -----> more detail please (how many pensions? currently value of each pension? which type of pensions are they i.e. DB or DC?

You said "get at it"  -----> what do you mean, do you want to start taking your pension? if so, do you want an annuity or do you want to take lump sums? and if its take lump sums, is it on a regular basis with a fix amount each month or occasionally take money? Or do you want to "get at it" and put it all into one pot? and if so, what are your plans thereafter?

How old are you? when do you want to retire? are your currently working? 

Its easy for me to say to you, open a SIPP and transfer all the DC pension into it (holding it as cash) and hopefully the SIPP pays interest on cash balances. Then make sure the SIPP provider has your correct tax code and then ask then for £16,760 (making sure they give you 25% of this tax free i.e. £4,190 and the remaining £12,570 you receive on a monthly basis of £1,047.50p thus you have paid no tax [caveat: aslong as you have no other income]. If you have any DB pensions, just leave them. PS: remember to stick £240 back into the SIPP each month as it will earn £60 in the form of tax relief.
This is what im doing but it might not be the right thing for you!

ooh, interesting thought! Now you see nobody has mentioned SIPPs!  Its 2 pensions, 60k plus 10k roughly, DC. At a very basic level I want the tax free sum plus a monthly income. This for immediate access as I am already retired.

A SIPP is just a type of DC pension, so very similar to the pensions you already have.

Probably makes sense to transfer the smaller one to the bigger one, or transfer them both to a new one.
Best to do that before taking the tax free cash, as it makes the transfer simpler/quicker. 

singhini

kr56 said:

ooh, interesting thought! Now you see nobody has mentioned SIPPs!  Its 2 pensions, 60k plus 10k roughly, DC. At a very basic level I want the tax free sum plus a monthly income. This for immediate access as I am already retired.

So this seems straight forward. You ask them for the 25% tax free, and ask them what annuity the remaining money will get you.  

HOWEVER, before you do anything, you need to read up on your pensions and as previously suggested you should speak to someone like PensionWise. 

You mentioned you are "already retired"   -----> am i right to assume you are over 65 (and if so, why haven't these pensions already started? The pension companies would have written to you before you turned 65 and so what did you say to them?)

Marcon

singhini said:

kr56 said:

ooh, interesting thought! Now you see nobody has mentioned SIPPs!  Its 2 pensions, 60k plus 10k roughly, DC. At a very basic level I want the tax free sum plus a monthly income. This for immediate access as I am already retired.

So this seems straight forward. You ask them for the 25% tax free, and ask them what annuity the remaining money will get you.  

HOWEVER, before you do anything, you need to read up on your pensions and as previously suggested you should speak to someone like PensionWise. 

You mentioned you are "already retired"   -----> am i right to assume you are over 65 (and if so, why haven't these pensions already started? The pension companies would have written to you before you turned 65 and so what did you say to them?)

Not necessarily. Nothing special about 65 - OP could have set a higher retirement age, albeit they could choose to access the funds before then.