The Lemon Fool

Hello
Not sure where to transfer my pension.
I’m 54 and I have about £150k in a pension fund with Clerical Medical. Their plan only offers an annuity and no flexi-access drawdown so I’d like to transfer the balance to a SIPP as I want to have access to the money when I need it.
I’m not an experienced investor so I’d probably choose a cautious ready made portfolio. I’m undecided between A J Bell and Hargreaves Lansdown. Any advice would be gratefully received!
Also, I haven’t contributed to the pension for over 10 years so I’d like to contribute now. My gross annual salary is £25k - I have some savings so could I add £ 75k to it?
Thank you in advance for any replies.
Lola

HL are efficient but have a reputation for high custodian charges for funds. But those charges are capped at £200 if you only invest in ETFs, which is probably fair value for your £150k.

The pension allowance carry-forward is only useful if you earn more than £40k, as then you could use allowance from previous years. You are limited to contributing your gross pay, so you put in £20k, and the government adds £5k. Those unused allowances from previous years can't help you, I'm afraid.

Thank you John.

Big decisions to make at a late age and with little investment experience
Take few months to read the subject up before you do anything
Monevator.com is a good website with practical advice
Lemonfool website is a another place with answers to your type of problem
Transfers seem to work but take time ad effort
Investing /handling a pension yourself is going to be a steep learning curve for you -lots of reading ahead
Can be done and nobody cares about your money like you do-so worth doing for a good result
xxd09

I use AJ Bell and I'm very happy with them. I understand that Hargreaves Lansdown are good as well. I think it comes down to what you'd be investing in and who would charge you less. I think both offer excellent service.

Thanks xxd09 and fisher

I agree with you xxd09 about
“Big decisions to make at a late age and with little investment experience”
but the annuity offered by Clerical Medical is just laughable. I calculated that I’d have to live to 105 to claim back the money I paid into it. That really is my only reason to move my pension. I want to have access to it soonish as I’d prefer to invest it in property.
But I really don’t have much knowledge of shares or stock market.
Should I abandon the idea of a SIPP and go for a stakeholder or ready made personal pension? Or go for a Sipp but just leave the funds on a tracker fund?

Thank you in advance for any advice.

Everything is relative and 54 seems very young to me!

You need to understand your own perception of risk, and the differences between active and passive funds. Read Lars Kroijer's Investing Demystified.

Thank you all.

Depends when you want to retire
If you have some years then time to learn
If the offered annuity is poor then you have some leeway even if you don’t get things absolutely right
A Vanguard Global Equities Index Tracker Fund/ETF in a SIPP is a reasonably safe investment but it is all stockmarket so will go up and down
You really have to do the work yourself as people’s wants are unique to them
Keep asking -it can be quite fun and it’s your money
xxd09

At 54, and earning £25k per year, you don't have much opportunity in either time or money to make up the difference if you make investment errors.

Therefore whilst transferring into a SIPP to avoid being trapped (rightly or wrongly) into an annuity is an understandable move, one should then be very cautious about what is the investment choice(s) to make once into the SIPP.

You mention going into property - I'm not sure that is possible. But whatever you do think carefully and take your time. You will find it difficult to refill the pot of you make a mistake, in all probability you won't be able to refill it.

regards, dspp

The Monevator site is worth a browse as well
https://monevator.com/

dspp wrote:Therefore whilst transferring into a SIPP to avoid being trapped (rightly or wrongly) into an annuity is an understandable move, one should then be very cautious about what is the investment choice(s) to make once into the SIPP.

It's worth mentioning that the OP probably isn't trapped into taking an annuity with the original provider. A lump sum should be available at his retirement date which could be transferred into the best the annuity market could then offer. Whether this is the right choice is for the OP to decide whether almost absolute security of the lifetime income is a primary objective.

Was/is the term for this “The Open Market Option “ which all annuity providers were eventually forced to subscribe to
Could be the best way forward-certainly get quotes from other annuity providers before making any more decisions
xxd09

xxd09 wrote:Was/is the term for this “The Open Market Option “ which all annuity providers were eventually forced to subscribe to
Could be the best way forward-certainly get quotes from other annuity providers before making any more decisions

The OP has expressed a desire to go for flexi-access rather than an annuity. This is sensible, in my opinion.

Scott.

swill453 wrote:

xxd09 wrote:Was/is the term for this “The Open Market Option “ which all annuity providers were eventually forced to subscribe to
Could be the best way forward-certainly get quotes from other annuity providers before making any more decisions

The OP has expressed a desire to go for flexi-access rather than an annuity. This is sensible, in my opinion.

Scott.

That's true, but the expression of preference for flexi-access was based on the poor annuity offered by his current provider, and may have been made without fully understanding the range of other annuity options that are available, including ope market, but also health impaired if OP is unfortunate enough to have had any of the qualifying conditions.

I am in the process of transferring my money from standard life , I had to sell my funds and buy into a cash fund , no other option available if I was not staying with them. AJ BELL contacted them on the 11th sept and to date nothing has happened . It does not seem there is a specified time frame in which they have to respond but it may be something else to take into consideration.

Thank you all again for your replies. Food for thought!
I’ve just spoken to Clerical Medical again and apparently they are now offering the possibility of transferring the pension at 55 to another scheme within their organisation that will offer flexi-access drawdown. This is not what I was told last time I spoke to them (admittedly over a year ago). So I may stay with them in the meantime and start reading up about investing before my next move. But I still like the idea of a SIPP and the lower charges it offers.
Re: Holts - good luck with your transfer from SL. I hope it gets sorted quickly.