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SIPP v Transfer for Old Pension?

Including Financial Independence and Retiring Early (FIRE)
Aminatidi
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SIPP v Transfer for Old Pension?

#450614

Postby Aminatidi » October 16th, 2021, 4:46 pm

I changed jobs a few months ago and still haven't worked out what to do with my old pension plan.

It's a Royal London DC plan with around £65K in it which is all in their Royal London Governed Portfolio 4 fund.

Options seem to be to leave it with Royal London, transfer it to my new employers Aviva scheme, or to transfer to a SIPP and look after it myself.

I already have around £275K with HL split between an ISA and a general investment account so I'd consider myself reasonably competent at looking after my money.

From reading the Royal London benefits document there don't seem to be any significant benefits I'd be losing by transferring from Royal London.

Likewise the Aviva scheme with my new employer is decent @ around 0.49% all-in for the default funds but obviously quite a limited range of funds.

Any thoughts on pros and cons of leaving it with Royal London v transferring to Aviva v transferring to a SIPP.

I should add I'm mid 40's and have an old DB pension too as people sometimes comment that £65K is a small pension pot to have by my age.

kempiejon
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Re: SIPP v Transfer for Old Pension?

#450617

Postby kempiejon » October 16th, 2021, 4:56 pm

I collected a few old pensions into a SIPP With HL.
Mine were charging around 0.5-0.75, HL capped at £200* was an instant cost saving with my balances.
You didn't mention charges for the existing provider, HL want 0.45% for funds,uncapped.



*HL cap fees for shares, etfs, investment trusts etc, funds I think are uncapped %ages but I don't have any funds.

Aminatidi
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Re: SIPP v Transfer for Old Pension?

#450619

Postby Aminatidi » October 16th, 2021, 5:06 pm

With Royal London it's 0.35% with the default fund and with Aviva it's 0.49% though as I'm effectively starting from £0 in that one I've switched it to an active growth fund so it'll be closer to 0.7% all in.

If I considered HL for a SIPP it would almost certainly need to be comprised ETFs or ITs as their platform fees for OEICs are crazy.

One reason the Vanguard option appeals combined with being able to hoover up small amounts into a general account.

Alaric
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Re: SIPP v Transfer for Old Pension?

#450622

Postby Alaric » October 16th, 2021, 5:18 pm

Aminatidi wrote:I
Any thoughts on pros and cons of leaving it with Royal London v transferring to Aviva v transferring to a SIPP.


Perhaps reflect on how long you would be likely to stay with your current employer or any future one. If likely to change jobs moderately frequently, it may be a rational strategy to have a SIPP to consolidate all the closed pensions. So you always join whatever scheme is on offer and when you leave that employment, consolidate the accumulated funds into the SIPP.

JohnB
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Re: SIPP v Transfer for Old Pension?

#450643

Postby JohnB » October 16th, 2021, 6:28 pm

Ask whether your Aviva scheme allows partial withdrawls. As they are unlikely to be as cheap as a SIPP, sweeping out the money into a HL SIPP every couple of years will save you money, as even £60k will take you over the £200 cap. And being able to add odd exttra sums to the SIPP is likely to be easier than through the company scheme. With 10ish years to pension access age, you probably don't want to empty your GIA, but the tax breaks might tempt you.

Aminatidi
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Re: SIPP v Transfer for Old Pension?

#450695

Postby Aminatidi » October 17th, 2021, 8:53 am

To cover Alaric's point this change wasn't planned it was a TUPE transfer.

Aviva do allow partial withdrawals apparently though a point mentioned on another forum is that many SIPPs will mean I'm unable to access until 57 whilst the Royal London and Aviva schemes are "proper" pensions so I believe are 55.

The Aviva plan actually looks remarkably simple to add money to you just have to transfer via BACS.

I know it's the nature of pensions but I'm broadly averse to locking money away for at least 10 years so as you say I don't see me emptying the GIA into a pension any time soon.

ursaminortaur
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Re: SIPP v Transfer for Old Pension?

#450724

Postby ursaminortaur » October 17th, 2021, 10:56 am

Aminatidi wrote:To cover Alaric's point this change wasn't planned it was a TUPE transfer.

Aviva do allow partial withdrawals apparently though a point mentioned on another forum is that many SIPPs will mean I'm unable to access until 57 whilst the Royal London and Aviva schemes are "proper" pensions so I believe are 55.

The Aviva plan actually looks remarkably simple to add money to you just have to transfer via BACS.

I know it's the nature of pensions but I'm broadly averse to locking money away for at least 10 years so as you say I don't see me emptying the GIA into a pension any time soon.


The normal minimum age for accessing pensions is changing from 55 to 57 in 2028. Apart from some exceptions for the firefighters, police and armed forces public service schemes this will effect most schemes (a few schemes may have a protected age earlier than 57 written into their rules and escape the change but I'd expect there to be few such exceptions). Until 2028 the normal minimum age for accessing SIPPs and other pensions will remain 55.

https://www.gov.uk/government/publications/increasing-the-normal-minimum-pension-age-for-pensions-tax/increasing-the-normal-minimum-pension-age-for-pensions-tax

Individual members of registered pension schemes who do not have a protected pension age but take scheme benefits before age 57 after 5 April 2028 or those who would like to have taken a benefit but who now will not be able to. However, members of the firefighters, police and armed forces public service schemes will not be affected by this increase.

Scheme administrators of registered pension schemes will need to modify their systems to accommodate for these changes.

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Re: SIPP v Transfer for Old Pension?

#450826

Postby JohnnyCyclops » October 17th, 2021, 4:57 pm

I'm curious with the option to bring the RL DC into the Aviva DC scheme. Does that then create a single pot, and say, accessing SOME of it at 55/57 becomes harder if the OP is still in employment at that point and remains contributing to the Aviva scheme?

I.e. there would be an option with the £65k DC pot if it's kept seperate either with RL or in a new SIPP, to crystalise it all at 55/57, take 25% tax free and leave the rest invested for drawdown. Meanwhile leaving the Aviva DC scheme still being contributed to.

If it's all in Aviva would they treat it as two pots or one?

Aminatidi
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Re: SIPP v Transfer for Old Pension?

#450829

Postby Aminatidi » October 17th, 2021, 5:06 pm

JohnnyCyclops wrote:I'm curious with the option to bring the RL DC into the Aviva DC scheme. Does that then create a single pot, and say, accessing SOME of it at 55/57 becomes harder if the OP is still in employment at that point and remains contributing to the Aviva scheme?

I.e. there would be an option with the £65k DC pot if it's kept seperate either with RL or in a new SIPP, to crystalise it all at 55/57, take 25% tax free and leave the rest invested for drawdown. Meanwhile leaving the Aviva DC scheme still being contributed to.

If it's all in Aviva would they treat it as two pots or one?


Wow!

See that's another angle that I hadn't even considered (what retirement plan :))

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Re: SIPP v Transfer for Old Pension?

#476210

Postby miserlymartin » January 26th, 2022, 12:24 am

ursaminortaur wrote:
The normal minimum age for accessing pensions is changing from 55 to 57 in 2028. Apart from some exceptions for the firefighters, police and armed forces public service schemes this will effect most schemes (a few schemes may have a protected age earlier than 57 written into their rules and escape the change but I'd expect there to be few such exceptions). Until 2028 the normal minimum age for accessing SIPPs and other pensions will remain 55.

Individual members of registered pension schemes who do not have a protected pension age but take scheme benefits before age 57 after 5 April 2028 or those who would like to have taken a benefit but who now will not be able to. However, members of the firefighters, police and armed forces public service schemes will not be affected by this increase.

Scheme administrators of registered pension schemes will need to modify their systems to accommodate for these changes.


Hello, just coming in on this because this is the first time I have seen discussion of this topic with a link to the government policy.
"Operative date/ The increase in NMPA will have effect on and after 6 April 2028."

I will turn 55 in March 2028, so basically this means I can take my pensions on my 55th Birthday, but if I put it off until 55 and 2 months + I have to wait until 57 - 2030 ??

ursaminortaur
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Re: SIPP v Transfer for Old Pension?

#476216

Postby ursaminortaur » January 26th, 2022, 1:07 am

miserlymartin wrote:
ursaminortaur wrote:
The normal minimum age for accessing pensions is changing from 55 to 57 in 2028. Apart from some exceptions for the firefighters, police and armed forces public service schemes this will effect most schemes (a few schemes may have a protected age earlier than 57 written into their rules and escape the change but I'd expect there to be few such exceptions). Until 2028 the normal minimum age for accessing SIPPs and other pensions will remain 55.

Individual members of registered pension schemes who do not have a protected pension age but take scheme benefits before age 57 after 5 April 2028 or those who would like to have taken a benefit but who now will not be able to. However, members of the firefighters, police and armed forces public service schemes will not be affected by this increase.

Scheme administrators of registered pension schemes will need to modify their systems to accommodate for these changes.


Hello, just coming in on this because this is the first time I have seen discussion of this topic with a link to the government policy.
"Operative date/ The increase in NMPA will have effect on and after 6 April 2028."

I will turn 55 in March 2028, so basically this means I can take my pensions on my 55th Birthday, but if I put it off until 55 and 2 months + I have to wait until 57 - 2030 ??


https://www.aegon.co.uk/news/pension-ages.html

There will be a number of people directly affected by this increase. For example:

Those born before 7 April 1971 will be 57 by 6 April 2028 so would not be affected by this change irrespective of whether they had taken all, part or none of their benefits by then.

Those born between 7 April 1971 and 5 April 1973 could be affected if they have not taken all their benefits before 6 April 2028. In a worst-case scenario, someone born on 5 April 1973 would be 55 on 5 April 2028. If they still had benefits to take at 6 April 2028, they would need to wait until they reached age 57 on 5 April 2030 before they would be able to do so. It’s important to note that this could impact people who choose to take their benefits in stages using a phasing option or who choose to use a drip-feed drawdown facility.

Those born on or after 6 April 1973 will have a minimum pension age of 57 so will not be able to take any benefits until they reach that age.


Also worth noting the mention of phasing and drip-feeding drawdown which would mean that it would be OK for someone who reached 55 before 6 April 2028 to fully crystallise their pension pot at that time and then use drawdown to access the crystallised pot but the same person might be in trouble if they used UFPLS to access the pot leaving some to be drawn down later after 6 April 2028 as the remaining uncrystallised pot wouldn't be available until they were 57.

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Re: SIPP v Transfer for Old Pension?

#596467

Postby Aminatidi » June 19th, 2023, 8:49 pm

A bit of a thread resurrection.

I found out that the Royal London scheme does NOT have a protected pension age of 55 whilst my current employers Aviva scheme DOES.

Am I right in thinking that if I was to transfer the Royal London pension to the Aviva one that the funds would somehow be "ring fenced" so I can't just bypass the age restriction by moving it into the Aviva scheme?

Feels like the answer must be that the Royal London money would only be available from 57.

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Re: SIPP v Transfer for Old Pension?

#597847

Postby ursaminortaur » June 25th, 2023, 2:52 pm

Aminatidi wrote:A bit of a thread resurrection.

I found out that the Royal London scheme does NOT have a protected pension age of 55 whilst my current employers Aviva scheme DOES.

Am I right in thinking that if I was to transfer the Royal London pension to the Aviva one that the funds would somehow be "ring fenced" so I can't just bypass the age restriction by moving it into the Aviva scheme?

Feels like the answer must be that the Royal London money would only be available from 57.


Probably best to just ask Aviva. As far as I am aware when you transfer to another scheme it is the new schemes rules which count - I wouldn't expect that Aviva would want to have to cope with the extra complexity of ring fencing money transferred in to comply with rules of the scheme they came from.

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Re: SIPP v Transfer for Old Pension?

#597854

Postby Aminatidi » June 25th, 2023, 3:04 pm

ursaminortaur wrote:Probably best to just ask Aviva. As far as I am aware when you transfer to another scheme it is the new schemes rules which count - I wouldn't expect that Aviva would want to have to cope with the extra complexity of ring fencing money transferred in to comply with rules of the scheme they came from.


I did. I always think of this stuff when everywhere is closed :)

You're right there's no ring-fencing anything transferred in benefits from that protected age.

So I think right now the plan is open a Vanguard SIPP as I have new cash to invest and maybe get the Royal London pension transferred to that and then down the line I can transfer the Vanguard SIPP to Aviva.

Keep in mind I have no clue when I'll want to access this but I'm nearer 55 than 57 so it's nice to know I can get at it sooner if I need to.


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