Financial Advisor Woes

TheComputerGuru

The Aegon account we are discussing has an enhanced tax free allowance (say 40% instead of 25%)

I want to consolidate all my pensions into ii

AFAICS if I take my 40% tax free then transfer the remaining 60% to ii

When I draw down on that I WILL be subjected to 40% tax if I exceed £37,700 (£50,270 - £12,570) in any tax year.

Also I suspect having two amounts in one ii SIPP may cause issues

dunstonh

https://forums.moneysavingexpert.com/discussion/comment/82112903#Comment_82112903

Transferring it will default the tax free cash back to 25%.

Whereas taking the protected tax free cash and transferring the flexible benefits to the new provider results in less tax being paid.

Also I suspect having two amounts in one ii SIPP may cause issues

What do you mean by two amounts?

phlebas192

https://forums.moneysavingexpert.com/discussion/comment/82112942#Comment_82112942

Why would you withdraw more taxable cash from ii simply because you've transferred a crystallised pot rather than uncrystallised? As QrizB pointed out, you would take the same taxable amount from ii and the rest from the tax free cash you've already taken out.

If your protected TFLS is in the region of 40% then it would seem a very strange decision to give that up extra 15%.

TheComputerGuru

I have three pensions currently with other providers

If I transfer two of them as is taking nothing, then transfer the third taking my TFC (40%)

I would imaging that there would be all sorts of headaches in my ii SIPP having two pots one with TFC and one without any TFC.

As I said this is a guess, based on what my FA said.

TheComputerGuru

All depends on what management infrastructure ii have for me to manage MY funds

NoMore

https://forums.moneysavingexpert.com/discussion/comment/82112980#Comment_82112980

When using FAD with any pension provider, you create two 'pots' one crystallised, where the tax free has already been taken and one uncrystallised where tax free is available.

II themselves use a notional pot split for this, where it happens in the background via a percentage split rather than two physically separated pots.

Also according to this

SIPP Transfer | Transfer Pension to SIPP - ii

II do allow transfer of pots in drawdown, suspect your FA doesn't want to lose your business and just throwing up irrelevant barriers

TheComputerGuru

… suspect your FA doesn't want to lose your business and just throwing up irrelevant barriers

Yep I 100% agree with that.

He is wanting to feather his own nest and take a regular cut of my hard earned money.

dunstonh

I would imaging that there would be all sorts of headaches in my ii SIPP having two pots one with TFC and one without any TFC.

No headaches at all.

jaybeetoo

https://forums.moneysavingexpert.com/discussion/comment/82112871#Comment_82112871

You do not need to take tax free cash when you drawdown from a pension. However, you’d be mad not to as you end up paying tax unnecessarily. I think the OP needs financial advice.

TheComputerGuru

The small amount of extra tax (40% vs 20%), which I may have to pay is a small price to pay for simplification of the draw down process by doing it ONCE in one site.