Drawdown @ 55

bluemonday3

Hi 
I am just seeking some advice regarding making a drawdown on my private pension.  
I reached 55 in January and I am wondering if need financial advice to draw on the pension as I think my provider states that if I drawdown the rest of the funds need transferring?
Is this something people are confident to manage themselves?
Many thanks in advance   

El_Torro

Some pension providers only give you limited options, for example only allowing you to take a tax free lump sum and buying an annuity with what’s left. If your current provider doesn’t let you do what you want to do you can transfer your pension elsewhere. 

This isn’t particularly complicated and can all be done online. If you want to get an IFA to help you out you can, though if you only want them to transfer your pension elsewhere then I would say this isn’t money well spent. If you want advice on what to do with your investments and how when / to draw money down then this makes the case for an IFA stronger. 

xylophone

Are you saying that you have a defined contribution/money purchase pension without any safeguarded benefit/Guaranteed Annuity Rate ?

The pension provider does not offer full flexibility? See

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

If you require such flexibility, you have a choice of new  providers and it might well be administratively easier to transfer to one of them before

accessing the pension?

Example


https://www.hl.co.uk/pensions/transfer-to-the-sipp?theSource=PCGSA&Override=1&adg=G+SIPPENT+GEN+ACCOUNT+RSA&gad_source=1&gad_campaignid=177765997&gbraid=0AAAAADwZS0_heqxCei3LSjiWKReIMyYpG&gclid=Cj0KCQiA5abIBhCaARIsAM3-zFUavwD2a2OT6fPqRipY3TAHoSRtKNWdr7FogyVPwB5Tc1fmTjlPGjAaAi56EALw_wcB

You would need to ask the new provider to organise the transfer.

After transfer, you would need to decide on your access strategy, see link above.

Many people do self manage their pension.

If you are not confident about your ability to do this, you might wish to engage an IFA - you might find below of assistance.

You would tick confirmed independent and other options required when the menu comes up.

https://adviserbook.co.uk/

bluemonday3

Great thank you, they have advised that I can take 25% tax free then move the rest to a flexi access drawdown where it is still invested and I mange it myself..  

dunstonh

Is this something people are confident to manage themselves?

Confident people do.    

I reached 55 in January and I am wondering if need financial advice to draw on the pension as I think my provider states that if I drawdown the rest of the funds need transferring?

Probably means the existing plan does not support drawdown and needs moving to a modern plan that does.
It may depend on what drawdown method you are looking to use as some legacy plans support some methods but not all.

Great thank you, they have advised that I can take 25% tax free then move the rest to a flexi access drawdown where it is still invested and I mange it myself..  

Was that generically or the plan you have will allow it? 

bluemonday3

Thank you, for your advice... My main pension is with Aegon and is from a previous employer, I have three smaller pensions with other providers.
It just states it is a 'self invested personal pension' 

Quote from a transcript I had with Aegon when I asked what my options were on drawing down.  

'You take part or all of your tax free cash as a lump sum, and then invest the rest of the money in a different product called a Flexi Access Drawdown. This is an income plan, where you have the flexibility to choose what income you need and when you take it. It’s a fully online plan that you need to manage yourself, which involves requesting income and managing or switching funds yourself. Any income you take is based on the plan value, and as it is still invested the value can go up and down.'

So I am assuming that I can drawdown.

I have had an appointment with pension wise but they just gave me 6 options for me to choose.. which still baffled me..! 


As you can tell I am not that confident, so maybe I do need to seek financial advice!

  

gm0

Some people do seek advice.  And this is "right" for them.  The adviser does 100s of cases.  Learning to do it for just one is either a "stimulating early retirement activity to keep the brain active".  Or monumentally tedious.  To taste.  

Adviser can help you think through when, how much, your capacity to take risk (other assets/income/state pension when of age), and attitude. And recommend something and implement to get you setup.  

1% of pot most likely as a charge.  Doing it yourself is free if you take the time to learn and sign up for a retail product and do the transfer yourself.  A few forms.  A bit jargon filled. But not complex - compared with say - buying a house.

And an adviser will happily keep an eye on you (ongoing service, annual reviews - investment product under review, income changes etc.  And provide other personal financial / tax advice as a side dish.  

This for ~0.5% of the pot every year. Rain or shine. Good results or bad. Perhaps capped. Perhaps not.  More % for smaller pots. Again the comparison for not having the assistance is "zero".  But you pay in time spent keeping an eye on it yourself. And any anxiety this generates.   Another factor is of course spouse interest level - in case they have to take over.  But you can start DIY and hire an adviser later.  Or switch to annuity or some other solution to "not having to bother with it"

Over life of an early retirement to death/40 years it's about 11% of the initial pot in fees for the help. 
On top of product costs.

Over a 40 year plan from early retirement. This is cheap or expensive depending on your perpspective on likely annual returns and the lack of any real connection between fee and your outcomes.   

Some people are motivated enough by that to take a look and think about having a go.  It's a free hit. 
Being better informed - even if you decide - it's not for me - and give up and go to find an adviser - it is not unhelpful - to better understand what they tell you. Via a small amout of prior reading.

Monevator blog.  Pensioncraft (youtube).  Four pillars of Investing. All good first places to look.  

Questions here also. It's how I learned alongside some book learning.

Product fees for a mainstream pension for drawdown investments recommended by an IFA.  And the fees you can achieve yourself DIY.  Are broadly the same.  You can create scenarios which show either one is superior in some circumstances.  But basically it's a wash.  The differences are  the advice fee.  And whether particular investments picked by either route - happen to do better or worse.  Which you cannot know.

You can of course make a mess of choosing your own investments.  It happens.  Or be unlucky in that a "normal for this type of customer" product after your fact find that your adviser recommends (correctly based on what you discussed with them) - happens to dump you in the muck - immediately after you switch into it. 

Some amount of uncertainty.  And individual drawdown DC pensions - go together.

bluemonday3

Thank you that is really interesting and has given me food for thought ...  It's made me look at this from a different perspective, so I am happy to carry on with more research