Income drawdown vs annuity purchase at retirement

jamesd

PyttsPete wrote: »

Can anyone confirm the lower limit of (I think) £50,000 to be able to claim an income drawdown pension? By that I mean that you must have a pension pot of at least £50,000 to be allowed to take an income drawdown scheme, investing in equities rather than annuities. And unless you do have the requisite sun you are lumbered with annuities only which expire when you do? Thanks

There's no legal lower limit. It's just what an individual provider will accept and the cost.

One fairly inexpensive place charges £75 for a GAD limit calculation that sets how much you're allowed to take as income. That has to be done once every three years so the annual cost is £25. £25 is equivalent to the reasonable income from a pension pot of about £500 so if you had less than £500 you'd get no income at all on average.

What Aegon is effectively telling you is that to do what you want you need to move your pension pot somewhere else.

An IFA would have no difficulty arranging this for you. Or if you don't mind the ongoig cost, Hargreaves Lansdown is one place that surely allows it. A place like Skandia via an IFA is probably cheaper long term than HL.

PyttsPete_2

Paul_Herrin, dunstonh and jamesd, for your replies. I have learned enough to continue digging with a view to achieving what I would like!

atush

Aviva is coming out with a new plan of the income drawdown type that will have a 30K min I can't remember the name as it hasn't launched yet but is something like retirement isnvestment acct or somehting).

I know this as we have a 41K pot in an old occupational scheme that has not been getting annual bonuses for years so at 55 hub is now going early retirement on that one pension (he has 3 others). but we dont' want or need the income as he is still working- we just want it to be somewhere earning money, even at cash rates lol. So we would leave it for the next 5 years and not take an income.

So with a 25% tfc, the pot is only worth 29K so have been researching this area.

HL Vantage might be our other option.

Iancfp

There are a dozen or more providers for that sized account - Aviva have very poor admin
HL depends on the funds you expect to use because of the level of backhanders they take affects the cost and can make them good or bad value

atush

I have called about 15, and only found 4 that will take a fund that small. Possibly because we live offshore?

But am still looking. Have already discounted the other 2 due to high charges.

dunstonh

Aviva is coming out with a new plan of the income drawdown type that will have a 30K min I can't remember the name as it hasn't launched yet but is something like retirement isnvestment acct or somehting).

Aviva coming late to the party I see. Loads do less than that. Cant see them being good value either.

HL Vantage might be our other option.

Costs the same as a servicing IFA. If you are want to DIY there are cheaper. If you want to pay that much you may as well use an IFA.

Possibly because we live offshore?

There is your snag. Many firms will no longer deal with no uk residents unless you come back to the UK to sign the paperwork.

atush

I am in the IOM so signing tends to be easier. But still............

ethanparker

[FONT=&quot]Retirement income can be derived from various sources but involves years of careful planning and a consistent savings programs. [/FONT][FONT=&quot]In modern financial planning,[/FONT][FONT=&quot] [/FONT][FONT=&quot]retirement income[/FONT][FONT=&quot] [/FONT][FONT=&quot]calculator plays a vital role. It is useful to create your own retirement plan.


retirement income[/FONT]

ethanparker

[FONT=&quot]Retirement income can be derived from various sources but involves years of careful planning and a consistent savings programs. [/FONT][FONT=&quot]In modern financial planning,[/FONT][FONT=&quot] [/FONT][FONT=&quot]retirement income[/FONT][FONT=&quot] [/FONT][FONT=&quot]calculator plays a vital role. It is useful to create your own retirement plan.


[/FONT]

TOMAT

If you are non-UK resident there are a lot of providers that will not deal with you as they have been burned by their own shortfalls in the past - I do know Legal & General will consider non-UK res but not sure of fund size requirements.