Tradefair & Financials
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25 Jan 10
18:27
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Date Joined:
25 Dec 05
the difference between an ordinary pension with profits and a sips,been told if i take my 25% lump sum the remainder goes into a sip which can go up as well as down ,is this not the case with the original pension , also said i would lose roughly 4% fot taking the pension lump sum early,any thoughts
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Replies: 12
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Do you mean SIPP?
If you take your 25% (Tax free cash) you have to take your benefits in some form or other both with the SIPP and With Profits Pension With the SIPP there is more flexibility in what you can invest in with the remaining money and more flexibility with the income you take Your With Profits pension however may have special Guaranteed Annuity Rates and this is what the 4% probably refers to although can't be sure Can I ask how old you are? |
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51 losing job and am thinking of taking the 25% to pay, of my mortgage, then leave the rest in a fund and continue paying into it,reason being i,m going to be made redundant and wont be able to carry on paying contributions if out of work,but by paying off mortgage funds will be available to carry on paying contributions and reacess it further down the line
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Sounds like a good plan! Sorry to hear about your job poster.
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Oh Poster,
Be careful with pension advdiser. If they can get you to transfer your remaining pension they will earn A LOT of commision.Who is your pesion fund currently with? |
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You dont have to take any benefits other than the 25% unless you buy an annuity at that time with the balance.
Maybe chisel can cionfirm if im right or wrong. |
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Harry absolutaley right. But it appears that the adviser may see a pay day in store. By recommending taking a lump sum and transfering the remaining fund to another provider big commission can be earned. I am not saying not to do it , but at 51 the benfits of transfering your pension fund may not be as advantageous as for a 30-40 year old
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its with standard life and this was only on 2 phone conversations,ill be seeing him on the 15th of feb for a proper talk,we are not talking about a huge fund here so the annuity route will be a non starter really,just trying to make the best of a bad job really , the job has not deffo gone yet and with the notice required will get at least another 4 months maybe more but once april 6 comes and goes i,m stuck till i,m 55, the remainder of mortgage isnt huge either with plenty of equity but the mrs wants peace of mind
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Chisel, do not brush all pension advisers withthe same brush.It is likely he may not be able to go into drawdown with Standard and will have no other option than to transfer.By transfering to most Sipps there are no commissions payable,it would be fee based,which would be agreed wit the client prior to the transfer.
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If its a with-profits fund the 4% probably refers to the Market Value Reduction (MVR), which is an effective reflection of the real value of the underlying funds. If left to selected retirement age, usually 60 or 65, then no MVR is chargeable.
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Standard Life do offer a drawdown facility.
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standard life make al capone look like a member of the salvation army...
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not if you use their wrap creditor
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