Pension wise appointment
Posted: April 1st, 2021, 5:18 pm
Hi all
I had my pension wise appointment earlier today and found it extremely helpful when looking at my options for my SIPP (I turn 55 next month). The lady was very thorough in reviewing the 6 options
1. Leave as is
2. Buy an annuity
3. Flexi access drawdown
4. UFPLS (otherwise known as "chunks")
5. Cash in the whole pot
6. A mix of the above (but Flexi & chunks are mutually exclusive - it's one or the other)
What I took from it:
* Unless you leave the money in your SIPP, the money moves from an investment product, to a pension product, with associated rules and regs. Although the SIPP wrapper still appears so it can appear that nothing has changed.
* Money Purchase Annual Allowance (MPAA) kicks in when you receive any taxable income from a pension product (apart from lifetime annuities)
So a flex access drawdown, where you only take the 25% tax free monies and keep the rest in drawdown, still allows you to contribute up to £40k (or your earnings) into your SIPP
* Need to ask SIPP provider about any guarantees associated with investments
* A significant benefit to pensions is protection from inheritance tax, but need to check providers do have your beneficiary's details correct
* If you die, your beneficiaries have 2 years to apply for drawdown / access to keep this tax free status
* You can take £500 each tax year out of your SIPP to pay for an IFA for advice (up to three times)
* Flexible drawdown can be done by yourself, or with an IFA, or via set investment pathways, but need to check what your provider allows
* Be wary of scammers - providers will never ask for your bank accounts over the phone or email
Shortly after the appointment I got a report with key facts and helpful questions to ask a SIPP provider around the 6 options.
Would definitely recommend using this service
https://www.pensionwise.gov.uk/en
https://www.pensionwise.gov.uk/en
I had my pension wise appointment earlier today and found it extremely helpful when looking at my options for my SIPP (I turn 55 next month). The lady was very thorough in reviewing the 6 options
1. Leave as is
2. Buy an annuity
3. Flexi access drawdown
4. UFPLS (otherwise known as "chunks")
5. Cash in the whole pot
6. A mix of the above (but Flexi & chunks are mutually exclusive - it's one or the other)
What I took from it:
* Unless you leave the money in your SIPP, the money moves from an investment product, to a pension product, with associated rules and regs. Although the SIPP wrapper still appears so it can appear that nothing has changed.
* Money Purchase Annual Allowance (MPAA) kicks in when you receive any taxable income from a pension product (apart from lifetime annuities)
So a flex access drawdown, where you only take the 25% tax free monies and keep the rest in drawdown, still allows you to contribute up to £40k (or your earnings) into your SIPP
* Need to ask SIPP provider about any guarantees associated with investments
* A significant benefit to pensions is protection from inheritance tax, but need to check providers do have your beneficiary's details correct
* If you die, your beneficiaries have 2 years to apply for drawdown / access to keep this tax free status
* You can take £500 each tax year out of your SIPP to pay for an IFA for advice (up to three times)
* Flexible drawdown can be done by yourself, or with an IFA, or via set investment pathways, but need to check what your provider allows
* Be wary of scammers - providers will never ask for your bank accounts over the phone or email
Shortly after the appointment I got a report with key facts and helpful questions to ask a SIPP provider around the 6 options.
Would definitely recommend using this service
https://www.pensionwise.gov.uk/en
https://www.pensionwise.gov.uk/en