Pension Transfers

Robin9

My wife is 68 and has a Personal Pension with Octopus (formerly Virgin) called a Self Drive. . Octopus do not permit the taking of a 25% tax free lump sum and also only pay out as lump sum.

They suggest she transfers it to a company that does. Do anybody know of a company that permits transfers in - then a 25%

She has her state and a tiny works pension so just in the tax bracket. No particularly reason driving the withdrawal - no world cruise or the like planned. We live quite happily on on joint incomes. The original plan was to draw on the pension when something happens to me.

Is the 25% really a benefit or is it best to let the sum grow (topping up annually with the £2880/£720) ?

El_Torro

Most people on this forum use SIPPs. For example one provided by Hargreaves Lansdown, AJ Bell, Vanguard or Fidelity. These all allow taking a tax free lump sum from a pension and can also be transferred into. More traditional pension providers like Scottish Widows or Aviva should be able to do what you want as well. Best to check with the provider before initiating the transfer.

Generally speaking it's better not to take the tax free lump sum if you do not have a specific need for the money. Better to draw down 25% tax free when you do start taking from the pension. This should allow for more tax free money to be taken in the long run. It also allows for further growth within the pension, where no Capital Gains Tax or other taxes are due (only income tax on withdrawal).

Albermarle

Do anybody know of a company that permits transfers in - then a 25%

Virtually every active pension provider will be very happy for you to transfer in to them. Cost is normally zero, and some even offer cash incentives from time to time. If you want some suggestions you need to give an idea of the sum involved, as each have their own charging systems, which may or may not suit the amount involved.

Is the 25% really a benefit or is it best to let the sum grow (topping up annually with the £2880/£720) ?

For sure you can leave it in the pension if you want. Or with most modern providers you do not have to take it all at once.

dunstonh

They suggest she transfers it to a company that does. Do anybody know of a company that permits transfers in - then a 25%

Most modern plans support drawdown.

She has her state and a tiny works pension so just in the tax bracket. No particularly reason driving the withdrawal - no world cruise or the like planned. We live quite happily on on joint incomes. The original plan was to draw on the pension when something happens to me.

The general rule of thumb is that if you don't need it, then don't take it. There should be some justification for taking it.

Is the 25% really a benefit or is it best to let the sum grow (topping up annually with the £2880/£720) ?

We don't know your circumstances.You would need to tell us why you think taking the 25% is a benefit.

As an IFA, the most common method of drawdown that we advise on is monthly UFLS. That is where the regular income has 25% tax-free and 75% taxable. But that's just a statistical view.

Marcon

https://forums.moneysavingexpert.com/discussion/6669208/pension-transfers

I think you might have misunderstood. The Octopus Self Drive pension does indeed only pay out as a lump sum, but 25% of that lump sum is normally tax free.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/82006351#Comment_82006351

I had read the op as inferring that only the 25% TFLS was wanted now. The rest would be left for a later date.

But maybe I've misinterpreted what the op means 🤷

Robin9

Her pot is £100k

Yes @Dazed that was our thoughts take 25% and leave the rest to grow. We were thinking of putting 20k into a SS Isa.