Transferring drawdown pot to Vanguard

[bots33]

Hi all

Looking to shortly undertake flexi access drawdown on my SIPP (currently with ii) and take 25% lump sum so I can invest in an ISA this tax year. SIPP only contains 2 Vanguard lifestrategy funds. ii quoting 0.9% fee (c £3.6k p.a.) on the drawdown balance which seems excessive given Vanguard charges a capped £375. Just rang Vanguard who mentioned it would take 10 weeks for an in specie transfer to them.

So my plan is to liquidate my Vanguard investments in the SIPP, initiate flexi asset drawdown with ii to take the lump sum now, and then transfer the drawdown balance to Vanguard requesting they invest in the 2 lifestrategy funds - this should reduce the amount of processing time. Not fussed about being out of the market for a month or so.

Appreciate any feedback to the above - am I missing anything?

Thanks

bots

[Urbandreamer]

Appreciate any feedback to the above - am I missing anything?

Thanks

bots

My thoughts are "why" and "why"?

Ok setting the first aside as it's very dependent upon taxation and your personal position, why pay two lots of fees?

OK! I admit that I pay three lot's of fees, but that is rather historic. II do ISA's and the fee for adding an ISA account is not that much.

FWIW, I transferred my AVIVA pension to II, joining an ISA that I had there as a SIPP to save on fees and grant greater flexibility. My first purchase was a Vanguard etf. Transferring to Vanguard would have limited my flexibility more than remaining with AVIVA.

Ps, I could draw upon my pension but am choosing to spend from ISA's in an attempt to address any inheritance liability, should I be hit by a bus.

[puffster]

ii quoting 0.9% fee (c £3.6k p.a.) on the drawdown balance which seems excessive given Vanguard charges a capped £375.

Where does the 0.9% fee come from? I can't see anything like that on the II SIPP charges page - just a £10 drawdown charge per month. Is it the OCF for the funds/ITs by any chance?

Regards, Puffster

[xxd09]

If you go to the Monevator website you will see a broker comparison chart for SIPPs and all their relevant costs especially for Interactive Investor
I don’t think you have your costs right -do hold fire and do some checking
Interactive Investor are one of the better and cheaper platforms especially for larger pension pots
xxd09

[bots33]

Thanks all, Which Money did a comparison in July that showed ii with fees of 0.3%, but when did their drawdown application, the fees were shown at 0.9% - have queried and awaiting response.

Thanks again for the feedback.

[2boi2]

Been thinking of writing in praise of II (Interactive Investor) for a few weeks now, this seems my chance. I very rarely if ever do such a thing.

I currently have a SIPP with ii which I have been winding down into ISAs for many years. I am used to swapping SIPP providers reguarly just to get the lowest fees as the SIPP total has declined. Been with AJ Bell/Sippdeal, Selftrade, Close Bros, X-O Liberty/Embark. It is a chore to do and I was relucutantly thinking of doing it again this year.

However out of the blue and unasked, ii wrote to me halving my fees due to the reduction in value of my pot (caused my withdrawals to ISAs). From £12.99 to £5.99 a month. They even backdated it and made last months direct debit only 99p. Not only that, they pay a decent rate of interest on my SIPP cash unlike many.

So I am very pleased with them, their admin has always been better and faster than my other providers anyway. The only downside with ii is I find their website not very intuitive but that may just be me and I do get it to work.

AJ Bell Sippdeal on the other hand refused to waive an exit fee upon a 144% increase in their charges, outwith the contract. I took them to the FOS (who are a bunch of jokers IMHO).

Vanguard will probably always be cheaper and their service is good (I put my partners SIPP with them) but my SIPP contains stocks which Vanguard wouldn't allow.

[TallInvestor]

Thanks all, Which Money did a comparison in July that showed ii with fees of 0.3%, but when did their drawdown application, the fees were shown at 0.9% - have queried and awaiting response.

Another happy (mostly) II SIPP customer in drawdown here. I think the confusion has arisen from the statutory information in the II Flexi-Access Drawdown Illustration. For example, one of mine states

How charges and expenses affect this drawdown arrangement:
Each year, charges will reduce the assumed growth rate by: 0.3%
So, if your investments grow at -0.59% above inflation, this will be
reduced to: -0.89%

These numbers are based on statutory figures and / or a guess at what you might do with your drawndown funds. They have no bearing on actual fees that II will apply, which are nil, unless your fund itself has exit charges (very unusual these days).

The easiest way to drawdown is a 2-stage process - 1. sell stocks / funds to achieve a cash balance of at least the desired drawdown amount. 2. Complete the drawdown request under 'Manage your SIPP' . It is not entirely intuitive the first time, but very easy after that, and I can assure you that there are no fees involved other than the usual trading fees, if any (probably nil for a fund). I believe you can skip step 1 and II will automatically sell funds to raise the required cash. This strikes me as undesirable unless you have a single fund or take a very passive approach to your portfolio.

[GeoffF100]

I have got a SIPP (fully invested in VEVE) with Vanguard (where I have a free account). I will be 75 in October, and have secure messaged them asking about my options. I want to do nothing, or as near to nothing as I can. The customer service representative takes several days to respond to each message. I have been told that Vanguard does not have a "do nothing" option at 75, and I have not given been sensible HMRC compliant answers to my questions about the options that Vanguard does offer. I may end up transferring my SIPP back to AJ Bell, or perhaps to HL (who are offering cashback). Cheap is not good if the service is bad.

[bots33]

Hi all, transfer now gone through. All very straightforward - ii very helpful in sorting out forms and communicating status of the process. Vanguard too. Out of market for 3 weeks.

[GeoffF100]

I have got a SIPP (fully invested in VEVE) with Vanguard (where I have a free account). I will be 75 in October, and have secure messaged them asking about my options. I want to do nothing, or as near to nothing as I can. The customer service representative takes several days to respond to each message. I have been told that Vanguard does not have a "do nothing" option at 75, and I have not given been sensible HMRC compliant answers to my questions about the options that Vanguard does offer. I may end up transferring my SIPP back to AJ Bell, or perhaps to HL (who are offering cashback). Cheap is not good if the service is bad.

I eventually got my query transferred to a van guard who actually knew what options their SIPP provided. The answers that I had been given were all wrong. I can just leave my pot invested at age 75, and do not have to make any subsequent withdrawals.

[ukmtk]

This might sound odd but depending on the size of your pot it could be cheaper to hold Vanguard with Hargreaves rather than Vanguard?
I only pay Hargreaves £200 per year for my SIPP because I avoid the recommended funds and only buy ETFs and ITs.
I was also under the impression that Hargreaves didn't charge anything for going into drawdown.