sipp

[Gavscottr]

I have four small amounts of pension savings in different pension funds amounting to c.�4K each and two others which amount to c.�40K and c.12K. Thus I am above the trivial �15K amount that enables me to encash them but they are being "washed out" by pension management fees. I am aged 63 and wish to retire very soon. It appears the only thing I can do is form a SIPP and make "draw downs" but this is not recommended for small pension funds I understand. What's my best solution?

[Pumpsticks]

Hi

You have a number of solutions. Without any details of your existing plans, or in fact any of your other investments, it is difficult to say what is best. Income drawdown usually has fixed charges and this is why it is not so suitable for smaller pension pots- some say under �100K. However, some providers don't have fixed charges and it may be suitable in your circumstances- look at the larger life assurance companies rather than smaller SIPP providers.

Look for any "guaranteed annuity rates" on your existing pensions- they will almost certainly be higher than what you can get on the open market.

The annuity rate you can get now may not be that bad and so you can get a guaranteed income rather than relying on invesmtent fortunes.

Whatever you do, don't take advice here! Go and find a decent IFA who specialises in retirement option planning.

Cheers

[Gavscottr]

Thanks for your advice. I should have mentioned the funds are unit linked so there are no terminal bonuses involved in any of them.
I will do as you advise and research more but in general do you think a single SIPP, which I hope gathers up all the existing funds, would be the best way forward now?

[Pumpsticks]

Controversial opinon here, but to be honest a SIPP is only really suitable where you intend to use the SIPP investment powers- e.g. purchasing a commercial property, individual shares. If your funds are going to be invested in mutual funds only then a good personal pension, or a pension on a "wrap" platform will suffice and should be a bit cheaper. Most of these offer a drawdown faciltiy. You would need to see an IFA about wraps as they are generally not available direct.

As for conslodating your pensions, you will need to if you do use drawdown, especially the smaller ones. It also make things easy from an income tracking and admin perspective. I would almost always recommend consolidating pensions before retirement.

Hope that helps a bit more.

[Gavscottr]

Thanks Pumpsticks. Your advice is both sound and informative as I have not come across "wraps" before. I'll talk to a good IFA for sure now and apologies for the delay in replying to your last message
Regards