Switching provider to access pension

ShouldISipp

I'm planning to begin drawdown from my DC pension from April 2026, I'll be 59. My current provider, Reassure, don't have an option to drawdown from the existing pension, and would need me to switch to a drawdown account with Standard Life. I am unsure if that's a sensible thing to do.

For background, my pension was originally with Old Mutual and is 100% invested in their OMR Index Balanced S2 Pension Accumulator Series 02 fund.

It has performed ok over the years with an average return of about 7.8%, and is currently worth approx. £740k

So before I jump in with Standard Life, I've been looking instead at moving to a SIPP with IG or similar, in part for lower charges (Reassure took approx. 3.5k last year). Note: I have confirmed with Reassure there would be no exit charges and also there are no protected benefits on my pension.

My initial question is: In moving my pension to a SIPP, will I be sold out of that OMR fund in the process, or would my existing investment in that fund move across to the SIPP, allowing me then to decide how to drawdown from that investment going forward.

Thanks in advance

dunstonh

Note: I have confirmed with Reassure there would be no exit charges and also there are no protected benefits on my pension.

Its not just protected benefits, it is safeguarded benefits that also need to be checked. The former does not prevent a transfer without advice but the latter could.

My initial question is: In moving my pension to a SIPP, will I be sold out of that OMR fund in the process, or would my existing investment in that fund move across to the SIPP, allowing me then to decide how to drawdown from that investment going forward.

You will be out of the market for about 2 -15 days depending on the receiving scheme. You cannot in-specie transfer insured funds.

gm0

This is going to be a 1-2 week transfer via CASH. Forget all the stuff on "in specie". It is what it is. Workflow. Fund unit sales (settlement - if an actual trade), bank transfer. Then re-investment. With many providers it is often not very transparent at each step as to where it is up to.

As you see - where an old product or scheme is pre-drawdown. There will often be a "house option" for a default destination as a convenience. A Master Trust or with Standard Life in this instance which you were offered. But you can use your full transfer out rights - to move to any provider you like who:

- offers the investment range you want
- at a cost you find acceptable
- with the digital facilities you consider essential/desirable
- and the drawdown access methods - monthly UFPLS - or whatever YOU want to do.

The offer you have been given could be good/mediocre/bad on fees. It depends on what was negotiated. So you will need to look at it carefully against alternatives.

Any "open market" SIPP will - usually - be offering "uninsured" funds for the most part - so £85k FSCS protection, not 100% as with older schemes using only insured funds. But there is nuance even here. And the protection difference should not be overstated. Custody arrangements for UK traded funds make SIPPs pretty safe in terms of asset recovery - even in platform failure. And the precedent of harvesting customer assets to pay company collapse administrators - has largely been avoided - so far. I would avoid niche small players and those offering anything offshore and illiquid - for that reason. Any of the majors isn't likely to be an issue. And protection of all kinds is largely untested by major disaster and subsequent litigation storm.

Having a POV on what investments you want to hold. Can influence which provider to choose.

Tony_J

I have now moved all my workplace pension (defined contribution) to a SIPP. When I first opened the SIPP I was able to transfer a specific amount from my workplace pension and continue holding/contributing to the workplace pension scheme. I just told my SIPP provider how much I wanted to transfer, didn't have to contact the workplace scheme.

Perhaps you could transfer enough to draw from for a year or so and leave the bulk where it is.

Sam_666

https://forums.moneysavingexpert.com/discussion/comment/81872225#Comment_81872225

So you didnt mind loosing full workplace pension protection for £85k SIPP protection?

Also, you last line advice is not possible in practice. Most workplace pensions have restrictions on partial transfers. i.e. Standard Life only allow partial transfers every 3y.

Tony_J

https://forums.moneysavingexpert.com/discussion/comment/81872337#Comment_81872337

TBH I wasn't aware of the full workplace pension protection. But even if I had been, I would still have chosen to move it. As its performance was so bad.

My workplace pension didn't seem to have any restriction. Perhaps its something the OP could check if he thinks its an idea worth considering.

Albermarle

As you will have to transfer in cash, then when the £740K arrives at your new pension provider, you will have to choose how to invest it, which can be quite daunting. I think though all providers nowadays have to offer a simple 'Investment Pathway' for drawdown, which is a basic off the shelf/one size fits all investment portfolio.

Standard Life is a solid option, but you can get lower fees elsewhere, if you are careful which investments you pick. Although with £740K you should get a decent discount with SL.

If you look at SIPPs, there are some established players, with good reputations for customer service etc.

Also there are some 'new kids on the block' with rock bottom fees.

You maybe interested to know that pension transfer cashbacks crop up from time . For a more established provider, Fidelity currently offer a cashback of £1800 for a pension pot your size and Interactive Investor £500 ( with low ongoing fees for a big pot)

One of the newer players , is offering 1% cashback to a maximum of £500. Their fees are very low/non existent but I do not think they offer a full drawdown facility.

There could well be others I have forgotten.