Vanguard SIPP - Timescale for drawdown

PParka

Due to the increase in the Normal Minimum Pension Age from 55 to 57 in 2028, I’ll only have a 3 week window after my 55th birthday to move my pension into drawdown.
My current workplace pension provider can’t guarantee they’ll be able to process this within that timeframe.
I’m considering transferring to Vanguard, as I already hold a small SIPP with them.
If anyone has started drawdown from a Vanguard SIPP, could you please tell me how long the drawdown setup took?
Was the process straightforward?

dunstonh

Due to the increase in the Normal Minimum Pension Age from 55 to 57 in 2028, I’ll only have a 3 week window after my 55th birthday to move my pension into drawdown.

The rules on those that straddle the age increase have not yet been published. So you don't know if you have a three-week window or not.

Albermarle

https://forums.moneysavingexpert.com/discussion/6666460/vanguard-sipp-timescale-for-drawdown

It is difficult to say as some providers seem to go through problem periods where everything takes longer than normal. This happened to HL recently where the timing for starting drawdown/taking tax free cash, went from a week or two, to a month or two. Then seemingly back to normal again. Last year Vanguard were often mentioned as causing long delays with transfers out.

Tony_J

I've just started drawdown with Vanguard, I was in no rush as I wanted the new tax year to start before getting any payments. But I think setting it up was probably less than a fortnight.

But my main suggestion is to give vanguard a call. I've found them to be extremely helpful

Exodi

PParka

Due to the increase in the Normal Minimum Pension Age from 55 to 57 in 2028, I’ll only have a 3 week window after my 55th birthday to move my pension into drawdown.

But if you take the current rules at their literal interpretation, it would mean you would be able to drawdown from your pension during the short window you mention, and then after you'll be unable to drawdown any more funds until you're at least 57. I think you're assuming that if you access drawdown from it once, drawdown would permanently be available to you, which I don't believe is currently the case.

It's not a problem no-one is aware of, as dunstonh says, clear rules around people that straddle the period are yet to be published.

Albermarle

Last year Vanguard were often mentioned as causing long delays with transfers out.

Would this be the time they added minimum charge levels, which penalised people with low balances? I remember there being a flurry of transfers at the time and people complaining about long transfer times.

PParka

Thank you all for your help.
My plan was to take the 25% tax free cash and put the rest into a drawdown account. If I cannot access the other 75% until I'm 57, then I will use the 25% tax free to cover the 2 year gap.

I wasn't aware that the rules hadn't been published yet - thank you dunstonh pointing this out.

DRS1

I think there was something from HMRC which suggested that you could do what you say you will do and still be able to access the 75% before 57. If you leave some the SIPP uncrystallised (ie don't take all 25% TFLS at 55) then you won't be able to access the uncrystallised bit until 57.

Slinky

You have 3 weeks, some people will only have 1 day. Surely they will have to put some measures in place to transition between one system and the other.

DRS1

What is to say you can't put things in motion before age 55 (as long as the crystallisation only happens once you reach 55)?

DavidT67

https://forums.moneysavingexpert.com/discussion/comment/81984080#Comment_81984080

In my experience, your pension provider won't let you start the application process before your 55th birthday as you aren't yet eligible to apply.

dunstonh

An IFA could have it all in place to do same day (including getting the tax-free cash within minutes.

This could be done by lining everything up in advance so the pension is already with a provider that offers same‑day processing and the required amount is sitting as cash on the platform. In those circumstances, the most efficient platforms, from a systems perspective, will send the money via CHAPS, typically arriving within 20–30 minutes of the adviser keying in the withdrawal.