Looking for a pension co that'll do 'Drawdown' for my two pots.

Jeepers_Creepers · 18 March 2019 at 4:07PM

Hello all.

Situation is that I have two teeny pension pots, one £13k (a closed Teacher's AVC) and one £34k (a closed Personal Pension). (By 'closed' I mean I stopped contributing to both years ago, when I gave up teaching.)

I have spoken to PensionWise who did understand that I have no need for these sums to provide actual pensions - both are too pitiful - but I would find the money useful right now to help pay off the mortgage and stuff like that.

So, this is what I'd like to do - get the money out over the next few years ideally with no tax to pay (I have zero earnings so have the full £11,850 pa allowance available to me).

Problems - the PP of £34k is with Phoenix (formerly Abbey Life, formerly Hill Samuel...) and they don't allow this sort of repeated cash sum withdrawal, just one initial amount and the rest will provide a (pointless) annual pension amount.

The AVC is with the Pru and they DO allow this - so I can get the £13k out in one lump sum if I want - hurrah! (25% tax free, and the remaining 75% will be below my annual tax allowance, so I can have it all tax free), but I'm still stuck with the Phoenix nonsense. I cannot transfer the Phoenix pot in to the Pru's pot as the Pru won't allow this due to me not contributing to their pension on a regular basis.

So, for the Phoenix pot of £34k I am left with either taking 25% and then having a stupid pension contribution from the remaining sum of less than £1k pa, or else cashing it ALL in and handing over more than £5k in tax on this £34k pot.

What I am wondering is if there is another pension provider that can be suggested who will allow both my wee pots to be transferred to it so's they are together, and from which I can then withdraw cash sums each year keeping it below the tax threshold - in theory I should have it all out in 4 years without having to pay any tax. Yes?!

Can anyone recommend such a company, please? Or another way out of this Phoenix manacle?

Many thanks.

Peter314 · 18 March 2019 at 4:12PM

Lots will do this. If I were you I'd tranfer to a SIPP with Hargreaves Lansdown, who have great customer service.

No annual charge if you're planning to keep in cash for the short time you'll be holding it there.

Albermarle · 18 March 2019 at 4:46PM

http://www.comparefundplatforms.com/
https://www.moneysavingexpert.com/savings/cheap-sipps/

Have a look at these.
Normally very quick to set up the SIPP but transfers in can take a few weeks .

wjr4 · 18 March 2019 at 4:54PM

Is your Pru Teachers AVC linked to the main defined benefit scheme? Can you take it fully as tax-free cash alongside your defined benefit pension?

As for your Phoenix Life pension, transfer to a plan that allows drawdown. Make sure there are no Guaranteed Annuity Rates, protected PCLS etc.

Jeepers_Creepers · 18 March 2019 at 6:04PM

Many thanks Peter and Albermarle - I think you'll fully resolved my issue. I really appreciate your replies.

Wjr4, I think you raise a good point as that's something else that's been confusing me... I've been aware that I have this Prudential pension pot which they call a Teachers' AVC Savings. They've kept me informed of this and offered all their options for me to choose.

In addition, tho', I was contacted by 'Teachers Pensions' to let me know of the contributions I'd made to that, and how it was linked to my final salary. This seems to be handled by the Pru as well, but is 'different'; different accumulated sum, different pension amounts, etc. I have no idea if they are connected in any way... Is that what you were referring to?

xylophone · 18 March 2019 at 7:22PM

In addition, tho', I was contacted by 'Teachers Pensions' to let me know of the contributions I'd made to that, and how it was linked to my final salary. This seems to be handled by the Pru as well,

Are you sure? This is your deferred TPS pension?

LHW99 · 18 March 2019 at 11:15PM

How old is the AVC plan. At one time there was no AVC actually attached to the Teacher's pensions, if you wanted to have this it had to be the old type FSAVC. Then they brought in the Prudential one, but initially it seemed to be run separately from the TPS - this may be what you have - perhaps from the late 80's? It could be linked in to the main TPS so you have to take them both together. Have you tried phoning the TPS? they're usually very helpful.

lisyloo · 19 March 2019 at 7:39AM

wjr4 wrote: »

As for your Phoenix Life pension, transfer to a plan that allows drawdown. Make sure there are no Guaranteed Annuity Rates, protected PCLS etc.

My Phoenix life has an MVR of around 30% before (I think) age 65.

dunstonh · 19 March 2019 at 11:11AM

but I'm still stuck with the Phoenix nonsense.

No you are not. You transfer it to a modern plan. Pensions are retail products. Like many other physical products technology and options change and new versions come out. The phoenix pension is a black & white TV when you want the latest and greatest options. So, you just transfer the phoenix pension into a modern plan.

Apart from stakeholder pensions, pretty much all modern mainstream plans support drawdown.

. I cannot transfer the Phoenix pot in to the Pru's pot as the Pru won't allow this due to me not contributing to their pension on a regular basis.

You probably wouldnt want to transfer it to them either. It does a job but a modern plan may do it better.

xylophone · 19 March 2019 at 11:43AM

You might consider transferring the Phoenix pot to Hargreaves Lansdown - they are very helpful on the phone and will guide you through the procedure.

You could take the tax free lump sum and then as much as will keep you within the Personal Allowance, ( £12,500 in tax year 19/20).

https://www.hl.co.uk/pensions

Investigate the link between TPS and the Pru AVC.

When will you be eligible to take your deferred TPS pension?

Have you obtained a new state pension forecast?

https://www.gov.uk/check-state-pension

Jeepers_Creepers · 20 March 2019 at 12:03PM

Many thanks for all the new info and advice.

Xylophone, I am entitled to the full state pension at 66/67 (whenever it is) as I've accrued enough NI contributions over my working life.

My TPS and Pru AVC malarkey are as follows: My 'Pru AVC Savings Facility' was accrued over three years - 1998-2000 - and amounts to around £8k with an added bonus of £4.5k, so this comes to just over £12k which would provide an annual pension of £720. I could make far better use of that £12k in cash to put against my mortgage, so I intend to cash it all in - it should all fall within my annual tax allowance as I have no other earnings.

The Teachers' Pension was seemingly built over 6 years in total from 1998 to 2002, some of that full time and some part time. In total it amounts to just over 3 full years of service. This is an 80th final salary scheme and it would provide on my retirement date (actually 2018) a tax-free lump sum of £4.8k and an annual pension of £1.6k - that is useful so I'll keep that as it is.

As far as I can see, these are two completely independent 'pensions' - one does not affect the other?

Dunstonh & xylophone, thanks - yes I appreciate I am not 'stuck' with the Phoenix situation as there are plenty of SIPP options out there for me - many thanks to all on this forum who have shown me this. My intention with the Phoenix £32k sum will be to transfer it so I can withdraw it at the maximum annual tax-threshold rate so I can use the cash to ultimately fully clear off my mortgage; it is not a significant enough sum to provide a useful annual pension.

I presume I would need a 'drawdown' or 'uncrystalised' option in my new SIPP to allow me to withdraw the cash sums as quickly as possible?

Looking for a pension co that'll do 'Drawdown' for my two pots.

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