Accessing small lifestyle pension pot

johnnyren

Hi 
      I’m 60 yrs old , semi retired taking monthly drawdown from a decent pension pot 
I also have through my previous company a lifestyle pension of 50k which I haven’t contributed to in around 3 yrs 
I would like to explore the possibility of getting access to the 25 percent tax free amount of the pot,      At first I thought I would need to transfer it out through a FA to a new provider to do so ,    But have also been told I can contact the existing scheme trustees and get permission to get the 25 percent without moving it out 
This Would be much better as it seems quite complicated going down the route of transferring it out 

  Any help please  thanks 

dunstonh

 But have also been told I can contact the existing scheme trustees and get permission to get the 25 percent without moving it out 

That suggests the scheme doesn't allow it, and you need to apply to the trustees to see if they can arrange that functionality.  If the scheme allowed it, then it wouldn't need to go to the trustees.

Are you sure they said trustees and not administrators or pension provider?

johnnyren

dunstonh said:

 But have also been told I can contact the existing scheme trustees and get permission to get the 25 percent without moving it out 

That suggests the scheme doesn't allow it, and you need to apply to the trustees to see if they can arrange that functionality.  If the scheme allowed it, then it wouldn't need to go to the trustees.

Are you sure they said trustees and not administrators or pension provider?

Thanks for reply ,    Yes capita informed me in the pack I received from them that I could get access to my benefits with trustee permission without having to move it out 
I have now written to capita asking if that would be possible 
my query on here was just to find out if anyone was familiar with this before I get my reply 
 thanks again 

dunstonh

Thanks for reply ,    Yes capita informed me in the pack I received from them that I could get access to my benefits with trustee permission without having to move it out 

This does seem to confirm that they currently do not support flexible access.  As I mentioned earlier, if they did, Capita would simply send you the forms and not involve the trustees.     Trustees are responsible for overseeing the rules, ensuring compliance, and determining functionality and options.   The administrators follow the rules.   So, a scheme that supports flexi-access drawdown in its rules would not need to go to the trustees.   

This may be a bigger issue than the trustees just saying yes, you can.  For example, your current pension is uncrystallised.  If you take your 25% only then it converts the 75% segment to crystallised benefits.   That means the pension software used has to support that functionality.   Modern software does.  Old software tends not to.     To support your transaction, it may require the whole scheme to move from one software solution to another.   That is a large-scale project that is usually measured in timescales like 12-24 months.  It's expensive.  So, if the scheme doesnt have much demand for an option, like drawdown, they are unlikely to want to spend the money.   Its cheaper for them to say you can transfer the pension to a modern scheme that does have that functionality.

my query on here was just to find out if anyone was familiar with this before I get my reply 

You haven't mentioned the employer.  Just the administrator.       We don't have access to the scheme booklet or the options they offer.    I have commented as close as you can get to an answer, but nobody knows whether it's a case of the trustees using old software without drawdown functionality or new software with functionality, but it hasn't been configured and enabled. 

All we know is that a request needing to be put to the trustees means it's not functionality that is currently available to scheme members automatically or at all.

johnnyren

dunstonh said:

Thanks for reply ,    Yes capita informed me in the pack I received from them that I could get access to my benefits with trustee permission without having to move it out 

This does seem to confirm that they currently do not support flexible access.  As I mentioned earlier, if they did, Capita would simply send you the forms and not involve the trustees.     Trustees are responsible for overseeing the rules, ensuring compliance, and determining functionality and options.   The administrators follow the rules.   So, a scheme that supports flexi-access drawdown in its rules would not need to go to the trustees.   

This may be a bigger issue than the trustees just saying yes, you can.  For example, your current pension is uncrystallised.  If you take your 25% only then it converts the 75% segment to crystallised benefits.   That means the pension software used has to support that functionality.   Modern software does.  Old software tends not to.     To support your transaction, it may require the whole scheme to move from one software solution to another.   That is a large-scale project that is usually measured in timescales like 12-24 months.  It's expensive.  So, if the scheme doesnt have much demand for an option, like drawdown, they are unlikely to want to spend the money.   Its cheaper for them to say you can transfer the pension to a modern scheme that does have that functionality.

my query on here was just to find out if anyone was familiar with this before I get my reply 

You haven't mentioned the employer.  Just the administrator.       We don't have access to the scheme booklet or the options they offer.    I have commented as close as you can get to an answer, but nobody knows whether it's a case of the trustees using old software without drawdown functionality or new software with functionality, but it hasn't been configured and enabled. 

All we know is that a request needing to be put to the trustees means it's not functionality that is currently available to scheme members automatically or at all.

My previous employer was Diageo who I was with for 37 years     They stopped the final salary scheme about 8 yrs ago and put me on a lifestyle plan 
I retired 3 yrs ago and am withdrawing monthly from a sipp invested with fidelity 
My ifa didn’t seem to want to take on the 50k lifestyle pension and told me to just leave it till I got to 67 
im really just trying to find the easiest way to get to the 25 percent tax free on it as I can make good use of it at present 

QrizB

johnnyren said:

 My ifa didn’t seem to want to take on the 50k lifestyle pension and told me to just leave it till I got to 67 

Do you have an ongoing relationship with your IFA?

If so, you should really be asking them to sort this out for you. That's what you pay them for.

johnnyren

QrizB said:

johnnyren said:

 My ifa didn’t seem to want to take on the 50k lifestyle pension and told me to just leave it till I got to 67 

Do you have an ongoing relationship with your IFA?

If so, you should really be asking them to sort this out for you. That's what you pay them for.

His company were only interested at the time on dealing with the large pot of 500k 
when I brought up the subject a month or so ago of how to deal with the 50k pot his advice was to leave it
i have a ex work colleague who is in a pretty much identical position as me and he had a tough time getting someone to take on his lifestyle pension ,    I’ve phoned around a few local financial advisors left voicemails ect and had nothing back
it was only when I read the pack I requested from my present provider of my options  I saw the possibility off maybe getting the 25 percent out without moving the pension out 

jimjames

You might be able to transfer it to somewhere like ii (interactive investor) which could gain you a decent cashback offer as well as easier access to the money. That assumes it doesn't have any special features that impact transfers

johnnyren

jimjames said:

You might be able to transfer it to somewhere like ii (interactive investor) which could gain you a decent cashback offer as well as easier access to the money. That assumes it doesn't have any special features that impact transfers

Thanks ,  I’ll wait to see what Diageo / capita have to say ,     I must admit I didn’t think it would be so complicated 

DRS1

The Diageo Lifestyle Scheme is a weird scheme.  I am not sure it is a traditional DC Scheme.  Yes a percentage of salary is contributed to the scheme but it is then revalued rather than being invested with you making the investment decisions   But I am also not sure it is a DB Scheme either.  If it were then transfers out may be difficult and expensive.  However this page suggests it may be possible and even normal (see the section on withdrawal from the scheme)

Your options | Planning for retirement | Lifestyle | Diageo Pension Scheme

Albermarle

This Would be much better as it seems quite complicated going down the route of transferring it out 

Normally transferring a DC pension/SIPP ( same thing really) is actually very easy nowadays.
You can do it online yourself- no need for an advisor ( unless you want one ).

However if the DC pension is not standard/has some guarantees/unusual terms then it can get more tricky.

Have you actually asked if it is possible to transfer out ?( to your Fidelity SIPP for example) as this may be the simplest option.