Low cost income drawdown - is it possible?

Laughing_Boy

Does anybody out there know of a low cost income drawdown plan? As far as I know I am obliged to use a financial adviser whether I want to or not - and I gather that even e.g. Hargreaves Lansdown will not allow clients to move from their SIPP to an income drawdown plan on an execution-only basis.

Any advice/info would be greatly appreciated.

dunstonh

As far as I know I am obliged to use a financial adviser whether I want to or not

No. Only on final salary scheme transfers is this normally a requirement.

nd I gather that even e.g. Hargreaves Lansdown will not allow clients to move from their SIPP to an income drawdown plan on an execution-only basis.

Modern pensions (which includes SIPPs) dont require transfer to another plan. They are able to crystallise the benefits and commence income drawdown from the SIPP or PPP.

Laughing_Boy

Many thanks for the reply, dunstonh.

dunstonh wrote: »

No. Only on final salary scheme transfers is this normally a requirement.

This is very interesting - I was told only this morning by an IFA that anyone moving into income drawdown had to receive advice as it is a complex and potentially risky area.

dunstonh wrote: »

Modern pensions (which includes SIPPs) dont require transfer to another plan. They are able to crystallise the benefits and commence income drawdown from the SIPP or PPP.

I was also told by the same IFA that I could definitely not start drawdown from a SIPP and that behind the scenes it had to be transferred when it's vested - i.e. if I take tax-free cash and commenced drawdown/unsecured income, it is transferred to an income drawdown plan with obligatory advice to do so.

dunstonh

This is very interesting - I was told only this morning by an IFA that anyone moving into income drawdown had to receive advice as it is a complex and potentially risky area.

Some IFAs (quite a lot actually) have a requirement that they will not transact income drawdown on execution only basis. Maybe "their" decision is not to transact without advice. However, there is no rule preventing it.

I was also told by the same IFA that I could definitely not start drawdown from a SIPP and that behind the scenes it had to be transferred when it's vested - i.e. if I take tax-free cash and commenced drawdown/unsecured income, it is transferred to an income drawdown plan with obligatory advice to do so.

Maybe he is thinking of an old fashioned plan that required that. Or maybe, he doesnt do drawdown himself and isnt aware that modern plans can do drawdown within the same plan. It you dont transact in an area personally you can get out of date very quickly.

EdInvestor

Laughing_Boy wrote: »

This is very interesting - I was told only this morning by an IFA that anyone moving into income drawdown had to receive advice as it is a complex and potentially risky area.I was also told by the same IFA that I could definitely not start drawdown from a SIPP and that behind the scenes it had to be transferred when it's vested - i.e. if I take tax-free cash and commenced drawdown/unsecured income, it is transferred to an income drawdown plan with obligatory advice to do so.

Dump this IFA, he speaks with forked tongue.

Probably the majority of SIPPS are in income drawdown, it was their main purpose for years and remains one of their unique selling points as it is a completely straightforward process. If you are in an HL Sipp already it will be very easy to arrange.

Just call up your SIPP provider and they will explain the process.

There is absolutely no need for advice.