Withdrawal from SIPP

yuri_2

Hi All,
I am investing in SIPP for 4 years holding an amount of about 30K after gains on investment likes to withdraw all the account because of financial problem.

If some can explain the complications of this withdrawal i.e. income tax penalty and any other in plain english will be highly appreciated.
Kind regards,
Yuri

Andy_L

You cannot withdraw money from a pension before retirement age (50 rising to 55 in 2010)
Unless, IIRC, you are diagnosed terminally ill.

purch

the complications of this withdrawal

The main complication, is that you can't withdraw the money

EdInvestor

I have to say that there is something wrong with the system if people are not being made aware that they cannot withdraw money from a pension until they are at retirement age.

It's not enough to say the clue is in the name - with some company pensions you can withdraw contributions if you leave before 2 years are up.

IMHO someone needs to make a test misselling complaint to get this rectified.

dunstonh

IMHO someone needs to make a test misselling complaint to get this rectified.

No indication that this was sold with advice.

No offence but to think you can draw your PENSION out before retirement age is a little on the daft side. Plus it is one of the main risk warnings on the key features.

The complaint would get far. Adviser would show there was a retirement need that was discussed in agreement with the client and pension meets that need. As long as the commitment was affordable then the complaint will get rejected.

EdInvestor

dunstonh wrote: »

Plus it is one of the main risk warnings on the key features.

Possibly so, but it's very apparent from this forum that people are simp0ly failing to get the point. Obviously the fact the money is trapped is one of the great risks of pensions and perhaps it needs to be even more prominently conveyed to the punter.

purch

there is something wrong with the system

I'm not sure you can blame the system for this one, more the lack of education offered, and our current culture of not having to take responsibility for your actions....(this action being, not doing any research, nor finding out what a Pension actually is..........especially a Self Invested Pension)

dunstonh

The self invested personal pension is for experienced investors. You would expect an experienced investor to know what a pension is.

Also, I know from experience that what you tell people does not sink in straight away. I have had people phone up and say "you didn't tell me this" and I say yes i did, remember the conversation on x date where we talked about this and said xxxx. You then get a "oh yes I remember now".

Its been estimated that around 30% of what an adviser tells someone sinks in and 70% is forgotten. Often very quickly. People generally hear what they want to hear.