A few numpty pension questions.

trickydicky14

A few numpty pension questions.

OK some back ground ,I have a DC pension with Zurich that is around 35 years old. Being an old school pension, it is very inflexible. It does not do draw down and I have to take it by my 75th birthday which is only a few years away. As far as I can see, the current pension does not have any privileges that I would loose if I moved it to another provider.

At this moment intime, I can’t see that I will need this money and would like to leave it for my wife after my death. The pension has done OK so I have put my head in the sand and let it run but now I’m of an age that I need to sort it out.

Q1. What would happen if I reach 75 and have done nothing.

Q2. As I approach 75 should I take my 25% tax free money because if I die after 75 my wife would have to pay tax on the whole amount in the pension.

Q3. Should I be looking to move my pension now and what should I be asking my current provider and new provider.

Q4. Would it be unlikely that I could move it ‘in-specie’ as a new provider would not have the same investments available. This is what is putting me off as I would not know what to go for.

Q5. What questions have I not asked that I should have.

Thanks for any help.

LHW99

1. Have you asked Zurich? It may mean you have to buy an annuity.
2. People often do around that age, particularly if you could get it into ISAs for your wife / self.
3. Maybe. Are you / your wife happy to manage it yourselves, how do you / she plan to use it eventually?
4. If you let people know what it is invested in, there are experienced people who would know for sure, but as it's an old policy with an insurance co, the funds may not be available elsewhere. Many DIY platforms do offer guided options based on how cautious you are.
5. You could make a free appointment with Pensionwise https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise/book-a-free-pension-wise-appointment they would talk you through the language and give guidance on your options. Then you could come back here with anything you still don't understand.

Albermarle

OK some back ground ,I have a DC pension with Zurich that is around 35 years old. Being an old school pension, it is very inflexible. It does not do draw down and I have to take it by my 75th birthday which is only a few years away. As far as I can see, the current pension does not have any privileges that I would loose if I moved it to another provider.

Looks like you need to move it

At this moment intime, I can’t see that I will need this money and would like to leave it for my wife after my death. The pension has done OK so I have put my head in the sand and let it run but now I’m of an age that I need to sort it out.

Correct

Q1. What would happen if I reach 75 and have done nothing.

Q2. As I approach 75 should I take my 25% tax free money because if I die after 75 my wife would have to pay tax on the whole amount in the pension.

Usually a good idea. Best to do this after you have transferred the pension to a new provider.

Q3. Should I be looking to move my pension now and what should I be asking my current provider and new provider.

Normally you do not need to inform your current provider. When you have chosen the new provider, you just ask them to transfer the old pension to them. Most are keen on transfers/new customers.

Q4. Would it be unlikely that I could move it ‘in-specie’ as a new provider would not have the same investments available. This is what is putting me off as I would not know what to go for.

It is very unlikely you could move in specie. There are simple low cost investment choices available nowadays, so it is not as difficult as you might think. One thing to think about is your risk tolerance. Presumably approaching 75 you will not want a higher risk investment, but on the other hand very low risk investments tend to grow very slowly.

Q5. What questions have I not asked that I should have.

How much does it cost to transfer a pension ? Normally zero.

Do I have to do it all on line ? Ideally yes , but there will be telephone support normally as well.

squirrelpie

A lot depends on your personal approach to life & money. It does sound like a good idea to move it to a new provider and to take your tax free cash before you are 75. So you need to decide how much involvement you want or need to have in its investment. It sounds like it would be a good idea to spend some time reading about the basics of pensions and investments, in order to understand the possibilities. Then decide whether you trust yourself to decide what to invest in (maybe global trackers and suchlike) and if you don't trust yourself or want to take the time and effort then look for an IFA (Independent Financial Adviser) who you do trust to take the decisions on your behalf and who you are prepared to pay to do the work.

DRS1

You say that "As far as I can see, the current pension does not have any privileges that I would lose if I moved it to another provider.". This is something you should ask Zurich in writing and get a written response not just a telephone call.

Another thing you could ask Zurich (if you are not keen on moving somewhere else) is whether they have a more modern scheme which could support drawdown and not require you to do something by 75 to which you could move your current pension (and which may allow you to stay invested in whatever the scheme is currently invested in). That is a bit of a compromise but may be where you want to go.

If you are looking to move somewhere new then do look at the charges and compare them with what you currently pay for the Zurich scheme - no point moving somewhere more expensive.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81903803#Comment_81903803

Another thing you could ask Zurich (if you are not keen on moving somewhere else) is whether they have a more modern scheme which could support drawdown

AIUI , Zurich are not a very active player in UK pensions anymore. On their website about retirement options it says ;

There are a number of options to choose from but they’re not all available direct from Zurich so you may need to transfer your savings to another provider to take the one you want.