My dad (62) has a secondary pension just sat with a pension provider, he doesn’t need it yet. Hes thinking of transferring it into the Free Trade SIPP.
If he transferrers it over and he then release 25% tax free then keep investing the rest without drawing it out?
This might have changed, but I don’t think FT supports drawdown yet. I wouldn’t recommend anyone near retirement age gets it until it’s more fully fleshed out.
Hi Simon,
When it comes to pension transfers it’s always good to speak with a financial adviser if you or your dad are unsure how to proceed.
I should note though that our pension product currently does not offer a drawdown function, so if he wants to withdraw a lump sum and keep investing the remainder, it may be better to withdraw that amount before he transfers from the current provider.
Again though, please do speak with someone to get some guidance on your specific situation. We’re not set up to provide advice.
He’ll also want to make sure that he doesn’t lose any valuable benefits by transferring the pension (i.e. if it was a final salary pension).
Best
Alex
I made a partial transfer request from my workplace pension to Freetrade 4 months ago. I have now been told that there are issues with the Freetrade SIPP and that HMRC were considering de-registering this due to concerns with the SIPP scheme rules and terms and conditions.
Would be nice if Freetrade could explain what is going on?
I’ve similarly waited four-five months and counting for a partial Sipp cash transfer. My provider suddenly wants lots of extra information, so I had to complete additional forms this time.
Last I heard a few weeks ago, Scottish Widows was going to cancel the transfer in 10 days if FT didn’t respond in time which I guess it didn’t.
If I was a new customer transferring my pension in, it would make an awful first impression.
I appreciate it’s frustrating that your transfers have been delayed.
Since we launched our SIPP, we have been clear that it is a product intended to help you build up a pension pot, but that would not (at least for now) pay out an income once holders reach the pension age. We made it clear to customers that when it came to the point you wanted to take benefits you would need to transfer to another pension in order to do so.
This approach (which is not unique to the Freetrade SIPP) and in particular the wording of the terms which explain this was challenged by some pension providers with HMRC when they were asked to transfer plans to Freetrade.
To resolve the issue we are in the process of issuing an update to the wording of our SIPP terms and Key Features. We will also make it possible for customers to draw benefits directly from their SIPP by Uncrystalised Funds Payment Lump Sums (UFPLS) at retirement. HMRC have confirmed they are satisfied with this approach and have relayed this to the challenging providers, confirming all is in order.
We’re disappointed that this has caused some (though not all) providers to delay transfers in to the Freetrade SIPP. As soon as the new terms are sent to customers (which will follow shortly), we will begin to chase up these outstanding transfers.
Thanks @acamp, the update is greatly appreciated.
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