Starting the process of accessing your DC pension

[Bonefish Blues]

It appears that there not going to make it easy, I guess a lot of it is a cautious approach due to fraud.

I honestly think it's more to do with a combination of utter ineptitude and the fact that, unlike say telecoms, there is no statutory timeline for transfers, so dragging their feet has no downside whilst your funds stay with them. The paper-based manual systems my company uses are way more open to fraud (and indeed simple error, as my wife found out to her considerable cost)

 

[kynikos]

I've got this in mind for my first withdrawal which will be small.

This wasn't the case with Vanguard - I took a large chunk out, tax free, no hassle, all explained by their pensions adviser.

 

[Profpointy]

I found it relatively straightforward to get 25% cash free sum from my largest pension (Scottish widows). It took a while but the multi stage process was clearly explained so fair enoufh . Cleared the remaining mortgage and bought ISAs and lived off it for a bit. The realised it also made sense to annually pay myself £12750 or whatever as pension as that too is then tax free, even though I didn't quite need the money at the time. Subsequently took 25% from an older pension (L&G)too, though that seemed a lot more of a rigmarole as if they didn't want to let people do it without an IFA. "Can't payout as you've quoted the wrong figure for the other pension's 25%". "what is it supposed to be?" "we're not telling you and we won't let you talk to the team who've worked it out". Their instructions were totally misleading leading to my wrong calculation. I was more or less at the point my next call would have been the FSA, but we got there, albeit painfully.

As someone mentioned, the pension bit was originally taxed but I got it back the next year. Now I'm getting it monthly it is no longer taxed if that makes sense as HMRC have caught up

 

[JohnHughes307]

This wasn't the case with Vanguard - I took a large chunk out, tax free, no hassle, all explained by their pensions adviser.

That is true for the tax-free portion, but if you don't want to take all your tax-free up front, either a regular or an UFPLS (?) where you only take 25% of the amount you withdraw as tax-free, then you need HMRC involved in the first withdrawal.

 

[simongt]

I used My Pension Expert and got a very good deal which was carefully explained enough to enable me to make a good decision for me for an annuity.
They also dealt with my LPAs; financial & health & welfare, again carefully & clearly explained.

 

[simongt]

I retired in 2023 and have some modest annuities in place.
In February this year, I had a letter from HMRC saying that I owed then £410 in unpaid tax, which surprised me as the annuity providers according to thier P.60s appear to be taking tax off my annuities at source.
I contacted HMRC, eventually had to pay up the £410 and the lad I spoke to did some resetting of tax percentages on the gbiggeset annuity.
So fine I thought, all well until I've just had a further demand for £1,140 in unpaid tax about nine months after the first one and my tax code has changed twice in six months.
I'm going through all my accounts, income, annuity income and things just don't seem to add up.
I will be contacting HMRC asking to explain what is going on, but can anyone shed any light as to what may be happening please - ?

 

[vickster]

I retired in 2023 and have some modest annuities in place.
In February this year, I had a letter from HMRC saying that I owed then £410 in unpaid tax, which surprised me as the annuity providers according to thier P.60s appear to be taking tax off my annuities at source.
I contacted HMRC, eventually had to pay up the £410 and the lad I spoke to did some resetting of tax percentages on the gbiggeset annuity.
So fine I thought, all well until I've just had a further demand for £1,140 in unpaid tax about nine months after the first one and my tax code has changed twice in six months.
I'm going through all my accounts, income, annuity income and things just don't seem to add up.
I will be contacting HMRC asking to explain what is going on, but can anyone shed any light as to what may be happening please - ?

Tax on interest on savings?

 

[yello]

Being French resident and post Brexit has changed the rules for me somewhat. My UK personal pensions can no longer provide a pension (annuity). I have to cash them in, pay UK tax at emergency rate, reclaim said tax (HMRC taking their time) then pay tax in France. Simple enough as a process but time consuming; phone calls and form filling. Patience is needed more than anything else.

 

[albion]

My online provider was easy. I ticked a box, request a set £500 per month, set a start date, and it started.
Unlike my ex-employer managed scheme who have a 'drawdown plan' that , it turns out you still have to transfer out to access drawdown.
In my request for transfer out I then received an annuity form to sign to access a pitiful standard yearly pension plus a very vague set of forms pertaining to my real request.

Also, the told me, over the phone, that if I accessed my 25% tax free portion the 75% remainder would cease to be eligible for a transfer out. Rather than move into contesting this I played safe and actioned the transfer, it possibly taking 8 weeks. But with their communications being as close to zero as you can get, it is fingers crossed time.

 

[Bonefish Blues]

My online provider was easy. I ticked a box, request a set £500 per month, set a start date, and it started.
Unlike my ex-employer managed scheme who have a 'drawdown plan' that , it turns out you still have to transfer out to access drawdown.
In my request for transfer out I then received an annuity form to sign to access a pitiful standard yearly pension plus a very vague set of forms pertaining to my real request.

Also, the told me, over the phone, that if I accessed my 25% tax free portion the 75% remainder would cease to be eligible for a transfer out. Rather than move into contesting this I played safe and actioned the transfer, it possibly taking 8 weeks. But with their communications being as close to zero as you can get, it is fingers crossed time.

Illustrates exactly the issue - it's pot luck whether you've got a good provider or one of the many who aren't really terribly interested in their 'customers'

 

[albion]

Not fully. The easy to access midern online one is one of the biggest management companies.
Whereas my old employers scheme is essentially still in-house, id 99% paper based. And no doubt has loyalty to keeping the assets. And I do recall many of the bosses getting quite large pay rises just before retirement/early to boost their 'salary based' pension.
Those older final salary pensions nearly always disadvantaged the average worker.

 

[Bonefish Blues]

My wife and my 'bête noir' organisation is one of the largest global players. We've had excellent service from smaller ones. There's no rhyme or reason I can see. My DBs seem OK, but I've not started drawing them yet.

 

[DCLane]

I've this coming to me in the next 1-5 years and hope the Teacher's Pension process is fairly painless. The accompanying smaller pensions I'm not overly concerned about as they're not worth that much.

 

[NorthernSky]

jumping in with a question. DC pensions normally get invested in lower risk funds around 5 years before retirement right?
did people see a massive drop in profits as opposed to when it was in the higher risk investments?
my company has my retirement age as 60 rather than 65, but my god it's proving a ball ache to change it
i would love to retire at 60 but not sure that will happen.

 

[Bonefish Blues]

jumping in with a question. DC pensions normally get invested in lower risk funds around 5 years before retirement right?
did people see a massive drop in profits as opposed to when it was in the higher risk investments?
my company has my retirement age as 60 rather than 65, but my god it's proving a ball ache to change it
i would love to retire at 60 but not sure that will happen.

You can typically override that default change in your funds if you wish.