Pension now set up, do I still need a financial adviser?

[68c]

I have been retired for five years, taking a monthly drawdown, did not take lump sum up front so get 25% tax free each month. The pension is running well. I see my financial adviser once a year for an update, get told all is OK see you next year. They are taking a percentage of my pot yet do not seem to do much after the initial set up. Do I still need a financial adviser, would I be better off saving their annual fees and just get advice for specific reasons, change in lifestyle etc.

 

[the1andonly]

I cant tell you what to do, this pension investment lark is full of potential grief.
My eggs are in more than one basket with one final sal pension giving a sensible amount.
The main investment is covered by a yank fund manager, they take an obscene amount of fees but the net returns are greater than Uk using a world approach and a personal review with respect to risk aversion etc. They are in regular contact and advise on market realigment purchases. They are not always at top of tree but the numbers ok with me.
If your advisor is not making changes adjustments to maintain your portfolio, he maybe just checking your not sliding or doing nothing at all. If you are happy to monitor your investments and do something when something goes pear, then dump him, me I'm happy to leave it to someone who knows a damned sight more me.

 

[Bailey58]

We invested through a Financial Advisor when we retired in 2003 and had a reasonable lump sum to invest from the sale of the business initially and, a couple of years later, when our private pensions became available. Much of the money went into corporate bonds but slowly over the years that has been transferred to ISAs managed through CoFunds which is now Aegas. Like you we see our IFA once a year and there is often a switch to a better performing fund so we are happy to pay the fees and let him do the paperwork. As you say, your man doesn't seem to do much but is your pension in one fund or scattered among many, will the drawdown change to a withdrawal at some time, where is the best place for such cash? Lots of factors to consider. You could have the same discussion with him and consider your options on one off fees for advice or continuing as you are, he is duty bound to give you the honest answers.

Edit: Just re-reading the1andonly answer reminds me that our returns to October when we saw him were 9.7% and 8.9% on the two Bonds and 8.3% on the ISAs net of fees.

 

[Stealaway]

They government do provide a pensions advisor free of charge.
We had an appointment with one of their advisor a few years ago and was very worthwhile.
Make an appointment?

The Pensions Advisory Service

The Pensions Advisory Service (TPAS) gave information and guidance to members of the public on state, company and personal pensions. It helped any member of the public who had a problem with their occupational or private pension arrangement.

www.gov.uk

 

[Otter Spotter]

As a retired adviser, my advice would be to stick with him but ask him the question ‘what will I get for the fees going forward?’ If the pension is invested in a portfolio of funds ‘How often is it checked and do they recommend switches if a fund goes south, are they offering cash flow planning? If so is that going to be updated on a regular basis?
Will he warn you if legislation changes may affect your pension. Does he monitor your withdrawals to ensure you are not ripping the guts out if your pot?

If he says no then I would suggest you either reduce his fees, or find another adviser. Remember he is charging you a fee So he has to do something to earn it, and all fees should be negotiable, not just a blanket % of assets under management.

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[Silver-Fox]

They government do provide a pensions advisor free of charge.
We had an appointment with one of their advisor a few years ago and was very worthwhile.
Make an appointment?

The Pensions Advisory Service

The Pensions Advisory Service (TPAS) gave information and guidance to members of the public on state, company and personal pensions. It helped any member of the public who had a problem with their occupational or private pension arrangement.

www.gov.uk

I called them a couple of years ago.
I was told over the phone that they could give advice which seemed odd as the ad for the service said they could

There was no mention of a face to face.

 

[Otter Spotter]

I called them a couple of years ago.
I was told over the phone that they could give advice which seemed odd as the ad for the service said they could

There was no mention of a face to face.

Tpas is not an advisory service, they can only steer you in a direction, they cannot ‘act’ for you and advise, recommend and arrange anything. They are more geared to explaining what you can and cannot do with company type pension schemes. All confusing

 

[Otter Spotter]

The6 have been rolled into the Money and Pensions Advice Service (MAPS) but they still cannot and do not give advice, it’s guidance

 

[On the road again]

Had my annual meeting with my IFA last week.We moved my pension pot to an actively managed one with much lower fees and my ISA's, including this year's allowance,into better- more productive- funds. I have a decent grasp of different products but not the wider expertise, knowledge and access to funds that he has and that is why I am (relatively) happy to pay the fees involved.
About 15 years ago I was going to move a pension to consolidate all my different ones. It was the IFA who pointed out that this pot had a GMP- guaranteed minimum pension - at my retirement date. A the time it was worth around 15k. The annual pension I get from it is 4.8k per year until I keel over. That would have been a very expensive mistake so I am grateful to the IFA.
I would stick with one but keep asking what can be done, what's the best product, is that the best fee rate you can get? etc etc

 

[Viennese]

I have a brilliant IFA. The company has over 20 years tripled my savings and recently at my request moved my money into ethical funds. It continues to pay me a smallish amount every month which, as if by magic, does not reduce my capital! I am happy to pay them to do this and enjoy my annual meeting with them!

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[Silver-Fox]

Tpas is not an advisory service, they can only steer you in a direction, they cannot ‘act’ for you and advise, recommend and arrange anything. They are more geared to explaining what you can and cannot do with company type pension schemes. All confusing

Ahh thanks for that, explains a lot.

You hear about the horror stories where people either get ripped off or the F A isn’t quite as good as you thought.

No different from choosing a builder or tradesmen I suppose

 

[Odd-no-more]

I set up my own drawdown pension after finding out how much an advisor wanted (Yorky) but I do pay for a managed fund as I don't want to spend my retirement reading the financial pages

 

[Stealaway]

The6 have been rolled into the Money and Pensions Advice Service (MAPS) but they still cannot and do not give advice, it’s guidance

When I saw the Government advisor I only needed some points clarifying and guidance, I had no intension of re-investing my pension pot or needing any advice.
I started an SIPP about 20 years ago. It was transferred lock stock and barrel from an Allied Dunbar final salary pension, -- then I retired early!
All the investments were initially set up by their adviser. Over the years various other small pension pots have been added to it and it has had a steady growth.
This year, aged 73, I have decided to draw down lumps. This was as simple as deciding to sell the worst performing stocks up to a value of £25,000 and taking that as a lump sum.
If I was actively investing for my future I may well have paid an FA but as time goes on I'm only interested in with drawing it all ASAP

 

[Speve]

If you have an IFA that you are happy with I would stick with him he will monitor your funds and advise on alternative funds etc if he is making your pot increase in value he’s worth the money

 

[68c]

Thank you for all the replies and suggestions. Just before I retired, at the state pensionable age, my IFA put my various private pensions together and opened a draw down account with the Prudential and of course charged me accordingly. I have now been drawing down for five years and, like others, my pot has actually increased by five thousand. I assume the Prudential are doing all the market chasing now so wonder if I now need the IFA. I know it was mandatory when setting up the pension but wonder am I wasting my money now.

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[The Wino]

I think the problem is you know what you have but not whether if you move it would be better or worse. If they offer little advice and don't buy/ sell many investments and you could buy the same ones yourself with the same charges I would be tempted to do it myself. If they actively manage the funds it depends if you feel able to do that yourself I don't think I could. We have some invested through the adviser and a couple of gambling ISAs that we do ourselves I don't think theres a huge amount of difference in the returns but the asviser ones required no effort from us at all.

 

[Otter Spotter]

When I saw the Government advisor I only needed some points clarifying and guidance, I had no intension of re-investing my pension pot or needing any advice.
I started an SIPP about 20 years ago. It was transferred lock stock and barrel from an Allied Dunbar final salary pension, -- then I retired early!
All the investments were set up by their adviser. Over the years various other small pension pots have been added to it and it has had a steady growth.
This year, aged 73, I have decided to draw down lumps. This was as simple as deciding to sell the worst performing stocks up to a value of £25,000 and taking that as a lump sum.
If I was actively investing for my future I may well have paid an FA but as time goes on I'm only interested in with drawing it all ASAP

Don’t forget then if you haven’t taken all the tax free cash you should take it before age 75 because after that you will be taxed on it at your highest rate, in addition should you die after age 75, any beneficiary will pay tax on the lump some or income at their income tax rates, on the pension fund which ever way they decide to access it. Depending on what their tax position is it may be advantageous to consider drawing as much as you can tax free and at 20% and if you don’t need it gifting it prior to death. Just thought you might want a heads up it may be worth having a word with an adviser to ensure tax man gets the least possible.

 

[The Wino]

Don’t forget then if you haven’t taken all the tax free cash you should take it before age 75 because after that you will be taxed on it at your highest rate, in addition should you die after age 75, any beneficiary will pay tax on the lump some or income at their income tax rates, on the pension fund which ever way they decide to access it. Depending on what their tax position is it may be advantageous to consider drawing as much as you can tax free and at 20% and if you don’t need it gifting it prior to death. Just thought you might want a heads up it may be worth having a word with an adviser to ensure tax man gets the least possible.

Thanks. Why do they have to make it so complicated!

 

[Otter Spotter]

Thanks. Why do they have to make it so complicated!

So HMG can get their greedy mits on as much as possible. Don’t forget that tax and pension legislation is designed by accountants from the top 4 firms who advise the treasury. Then they then rip millions in fees advising people on how not to pay the tax With dodgy ‘tax mitigation schemes‘. You can’t make this up

 

[Stealaway]

Don’t forget then if you haven’t taken all the tax free cash you should take it before age 75 because after that you will be taxed on it at your highest rate, in addition should you die after age 75, any beneficiary will pay tax on the lump some or income at their income tax rates, on the pension fund which ever way they decide to access it. Depending on what their tax position is it may be advantageous to consider drawing as much as you can tax free and at 20% and if you don’t need it gifting it prior to death. Just thought you might want a heads up it may be worth having a word with an adviser to ensure tax man gets the least possible.

Thanks for that it has reminded me of the pit falls.
That was the reason we had the meeting with the pensions advisor. Just to be able to draw down the pension with the minimum of tax liability.
Also to understand the consequence of the age limits
I took my Tax free cash many years ago

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[68c]

Did not know about the age limit, perhaps I should contact my IFA while I still have one!

 

[68c]

Looking further into the age 75 thing, am I right in thinking this applies to the 'lifetime limit' which is a little over a million pounds. As I am no longer contributing to my pension and it's worth less than half the limit at present do I need to worry about it?

 

[Otter Spotter]

Looking further into the age 75 thing, am I right in thinking this applies to the 'lifetime limit' which is a little over a million pounds. As I am no longer contributing to my pension and it's worth less than half the limit at present do I need to worry about it?

this may help, but before you read this I need to explain the difference between ;
Uncrystalised monies pension funds that have not been drawn in any way
Crystalised monies that have been drawn either by taking Commencement lump sum (tax free cash to you and me) or by drawing any sort of income.


Drawdown pensions
On death before age 75 the benefits can be paid as a lump sum or as a drawdown pension to any beneficiary tax-free, irrespective of whether they derived from uncrystallised or crystallised monies.

A lifetime allowance check will be made against uncrystallised benefits.
On death after age 75 the benefits can be drawn down or paid as a lump sum taxed at the beneficiary’s marginal rate.
On death after age 75 the benefits can be paid as a lump sum to a trust with a 45% tax charge.

Lifetime annuities
On death before age 75 any beneficiary can receive the payments tax-free.
On death after age 75 any beneficiary can receive the payments taxed at their marginal rate.

Before 6 April 2015 what benefits could be paid depended on whether the funds were crystallised or not. Since 6 April 2015 it is the age of person who dies at their date of death that affects the tax treatment of the benefits, there is no different for crystallised and uncrystallised funds.

I hope this helps and you can decide for yourself whether you will need advice before age 75.

 

[68c]

Many thanks, of course every explanation raises further questions . As I understand it, now I am drawing down on my pension I have effectively chrystalised the moneis have already drawn down. The remaining pot is uncrystalised. As the remainder is below my lifetime allowance it will not be hit by the higher tax limit. My partner and I are unmarried, we have been together over twenty three years and have a twenty year old son who still lives with us. This out of date religious tax laws need to be scrapped.

 

[Parrot Face]

The day I retired the cash went directly into the bank. A Barclays financial advisor turned up at my house uninvited and offered me advise. He gave me his best percentage investment rate but I told him I could get another half a percentage from an internet search . He looked shocked and eventually left. A few days later Barclays got rid of their financial advisors. I moved banks to Santander, saw there free advisor and was impressed. Stuck it all in their investment scheme and over the last 11 years i've been getting 7 per cent a year. I'm happy with that and get free financial advise whenever I need it. I'm no expert .

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[The Wino]

Many thanks, of course every explanation raises further questions . As I understand it, now I am drawing down on my pension I have effectively chrystalised the moneis have already drawn down. The remaining pot is uncrystalised. As the remainder is below my lifetime allowance it will not be hit by the higher tax limit. My partner and I are unmarried, we have been together over twenty three years and have a twenty year old son who still lives with us. This out of date religious tax laws need to be scrapped.

Agreed on the daft laws on marriage but you could just view it as a cheap paper exercise to avoid possible complications.
As I understood it once you take money out by drawdown the whole pot including the part remaining in the pension becomes crystallised.
That being said Otter Spotter says it makes no difference now how the remainder is treated if you PYC

 

[Otter Spotter]

Many thanks, of course every explanation raises further questions . As I understand it, now I am drawing down on my pension I have effectively chrystalised the moneis have already drawn down. The remaining pot is uncrystalised. As the remainder is below my lifetime allowance it will not be hit by the higher tax limit. My partner and I are unmarried, we have been together over twenty three years and have a twenty year old son who still lives with us. This out of date religious tax laws need to be scrapped.

No problem,
before you start taking any money from your pension your whole pot is Uncrystalised, then if you decide to start taking benefits from you pension then you crystallise your pension pot as you start to take benefits.
So for example:

You decide to take full tax free cash (25% of the total pension pot) you have to crystallise the whole of the pot.

Alternatively If you decided that you didn’t need all the tax free cash, then you could just Crystalise chunks of your pot as required to create tax free cash and income.

it’s the remaining pot that is uncrystallised not the ‘monies taken out. So you can in fact have uncrystalised and crystallised monies in the same pension depending on how you take your drawings.
To complicate matters some pension schemes cannot handle the 2 in one pensions so they will split off your crystallised pot from the remaining uncrystalised pot and give it a whole new plan number and when this happens it starts to get confusing managing the underlying investments for some people.

Is the Lifetime allowance going ever be an issue for you ? Don’t get hung up on it unless you are likely to have more £1,073,000 in uncrystalised funds, if you have already started to draw I suspect it’s not an issue

 

[Silver-Fox]

I think Otter Spotter should set up a side line just advising those on here like me that doesn’t have a clue

For a fee obviously

 

[Otter Spotter]

I think Otter Spotter should set up a side line just advising those on like me that doesn’t have a clue

For a fee obviously

*

I think Otter Spotter should set up a side line just advising those on like me that doesn’t have a clue

For a fee obviously

thanks for the offer but I am not registered or qualified now as a Financial adviser any more as I am retired. This means that any information I give you is not specific to any one individual and should be crossed checked with a registered/qualified adviser, one who is Independent and not tied to one product provider.
Should you require specific financial advice I can recommend a very good adviser who will charge fees for his advice and services and is worth the money, I use him because I trust him and it helps that I helped train him

 

[Kozikot]

Who's going to be the richest in the Graveyard then ?

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