Drawdown - L&G or move elsewhere

tamste

I am retired on a comfortable DB pension and get the full state pension later this year. Since retiring I have also run my own consultancy business which I intend to strike off soon and go into full retirement. Excess profits from the business have been invested in a L&G workplace pension which I have had for several years, though not with this employer for >10 years.

I intend to draw lump sums periodically from this separate pension, either through L&G, or transfer it to another provider. This pension is currently worth ~£70k. My experience on making lump sum additions to this pension over the last few years from my business has been quite cumbersome, relying on emails to action anything. I am unsure if this drawn out process would be any easier once I take the pension and start drawdown. This is thus making me consider if I should move this pension to a SIPP platform for easier and smoother access using drawdown.

Any comments and suggestions on this plan, and recommended providers, with positives and negatives would be very welcome.

Tree_pipe99

I have a L&G (DC) pension in drawdown. It's a simple online form to take out a one off amount or change the amount of a regular payment.

dunstonh

Any comments and suggestions on this plan,

L&G have a variety of plan versions. Some of which do not support drawdown. So, first thing is to check your version does. And importantly, if the method of drawdown you want to use is available. Not all plans support all drawdown options.

gm0

L&G are not fully modernised. Even with some newer options like the mastertrusts used to offer drawdown to old regulated scheme members. So if you expect fully digital for all transactions you might come up with.
Then be disappointed.

On the other hand. They are big, reputable (in context). I find the people I have occasionally dealt with absolutely fine, a bit trapped by process but polite, well intentioned, friendly. Whether they can fix a long running exceptional problem I could not say. I haven't had one. Given the process and IT limitations I am not hopeful. But that applies to a lot of smaller competitors who are setup for self service until it breaks and also lack a hinterland to sort it quickly when it does break.

The pension offer is frequently for "insured funds" 100% FSCS compension not 85k SIPP. (A minor difference as custody arrangement make losing assets unlikely, and neither protection is legally battle tested (See also Equitable Life scenarios where it goes on a long time in dickensian Jarndyce vs Jarndyce mode).

Funds are usually market price. So a global indexer is an indexer at normal price. And the differences will be any scheme or product/platform fee. And the insurance aspect. And not a lot else. So you check the product/platform fee and decide if it's good enough. And if the often limited selection of funds works for you for this part of your portfolio. 10 for occupational schemes and maybe 30 for a drawdown master trust would not be untypical for L&G. Mostly their own LGIM. Active selection is skeletal and not to my taste. Not a good place for the selective active fund picker. For global passive indexing and extensions or tilts. It's fine. They have some cost effective multi-assets for some bonds and alt credit in the mix. Many people with a strong interest in investing would consider much of the more complex part of their offfer mediocre. But it's not really aimed at them.

Basically if you go with the grain of how they work - it's fine. If you insist in trying to make their IT and admin do new tricks i.e. workarounds for a particular way you came up with - then it's not fine. It will be pain.

You can avoid all that by transferring somewhere that already does exactly what you happen to want to do efficiently. I have minimal interaction. Rebalancing and income reset. That's it. Income ticks away monthly. Drawing on a sequence risk buffer a specific low volatility cash fund. Nothing gets sold other than when I do it at rebalancing. That suits my desired approach and carries a particular risk flavour. No buffers and unit sales each month would have different risk characteristics in flash crashes, corrections etc. And with more invested all the time - higher potential returns. It's all an unknown bet anyway from a range of more or less plausible choices as to how you set up.

I deal with them every 12-18 months at rebalancing to reset income. And I find their channel strategy a bit odd in terms of what you do on which methods. It's not terrible.