Getting the money!

CarrieMJ

https://forums.moneysavingexpert.com/discussion/comment/81930672#Comment_81930672

Thanks, but no, I'm not being scammed. Repairs are required.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81930673#Comment_81930673

As above , some DC pension providers will not accept a DB transfer without expensive financial advisor advice, whatever its value.

KrullTheSaver

So… £22895.03 DB pot, you need a lump sum, you have other means of support, don't see any need for the future DB income and are willing to lose it.

Defined Benefit puts the risk on the provider whereas a SIPP loads the risk on the individual (until and unless you buy an annuity). Sometimes pensions (both DB and DC) come with guarantees that aren't necessarily reflected in transfer values too. So keeping a DB is usually best for most people - but not all and even less so when they are small. Anyway…

As others have said, you could transfer it to a SIPP provider. Choose one with a fee structure you are comfortable with for the time you expect to use it. Check for instant wins (cash-back on transfers, check topcashback/quidco, ask for referral links). Make a transfer-in request with the SIPP provider, whole pot, as cash. That shouldn't take more than a couple of weeks (it's never guaranteed but cash only should be straightforward) - it probably depends on the DB provider more than the SIPP provider but it's the SIPP provider that drives the process so keep asking for updates if it seems stalled.

Once the transfer is complete make a request to go into drawdown taking the full 25% tax free cash (£5723) but no non-tax free income (unless you need it all). Many providers let you do that online. Since it's all in cash that should be reasonably quick too, another couple of weeks maybe. The remaining £17171 stays in your SIPP and still counts as a pension so can grow tax-free. You can also add more to it if you want.

If you need some of the taxable cash be warned that the tax man will adjust your tax code on the assumption that it's going to be regular monthly income. So take £1 of the taxable first, let the SIPP provider do the HMRC notifications and they'll get a tax code to use for you. Then you can request further lump sums or regular income. Check how your provider handles it - regular income requests are usually monthly, lump sum requests may or may not be more immediate. If you can't wait skip the £1 step and take what you need - you can ask HMRC to re-adjust your tax code after they've messed it up but it's a bit of a faff.

And finally… if you leave anything at all in your SIPP remember to do something with it. Buy something like a global growth & income and/or a global bond fund if nothing else. Cash is guaranteed to get eaten by inflation, funds have at least a chance of gains (even if it doesn't look like it at the moment).

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81930591#Comment_81930591

There's a knee jerk reaction on this forum whenever someone mentions transferring out a DB pension scheme: 'don't do it'. That reaction is very often correct, because the person posting doesn't understand what they are giving up, or the risks of having a defined contribution scheme instread.

However, such a 'blanket ban' overlooks the fact that sometimes it is the only option, even if financially it's not a great one. The cost of not sorting out serious issues with a roof are likely to far outweigh the modest future pension given up (and with a transfer value of that level, it'll be a very modest pension, even if it does increase in payment). You've recognised that you'll be taxed on 75% of the amount transferred when you withdraw it, and someone else has pointed out that you'll almost certainly need to reclaim overpaid tax from HMRC. See https://www.gov.uk/claim-tax-refund and make sure you use the right form!

Then last time I saw someone transfer their DB pension was to fund hip replacements for themself and their spouse - both were in intolerable pain and the waiting list was upwards of 6 months. Quality of life was transformed within a couple of weeks for both of them.

CarrieMJ

I really appreciate everyone's input here, you've all been brilliant, thank you.