Removing money from a SIPP before 55?

[Ruskie]

I started a thread based around this previously but I can't find it.

Basically I have £13k invested in a SIPP. Set up when I was younger. I have an NHS pension so no desire to pay I to the SIPP and have not done for 5 years.

I want the money out at any cost. At that level of investment it fetches £780 PA. I am willing to take a redemption hit to get a % out.

I have found some vague info about transferring the SIPP to an unregulated investment with no age limit but not found anything concrete.

I appreciate SIPP are not designed to be removed but it was set up when I was younger, was earning more, had much more disposable income and was financially a bit more naive.

Anyone shed some light on any options?

[DavidY]

I asked this question of my IFA yesterday, his response was that 99% of the sites advertisng such schemes were Scams, and that many people had lost tens of thousands of pounds. His reponse is that there is no official way until you are 55.

http://www.thepensionsregulator.gov.uk/press/pn12-...

[The Leaper]

An unregulated investment is not, technically, illegal. However, there are severe penalties for removing assets out of any formally approved pension plan before age 55 eg a tax charge of 55% before the money gets to the unregulated investment. If you go ahead, pay the tax and then high fees, do you really expect to get much? In your case, from the start you'll be saying goodbye to, say, £8500 on £13000. When do you get your hands on the balance...probably not straight away.

They are just scams to get large fees on a gross amount which when it gets to you is much a reduced after tax sum. Ask yourself: what's in it for you? Answer, lots of risk, little chance of getting your starting sum back.

Avoid!

R.

[Ruskie]

On a separate note. If I can't get the money out can I instruct my SIPP holders to invest it in high risk and gamble and making into something worthwhile?

[PurpleMoonlight]

It is not unlawfull to fully encash this pension but as has been stated you will suffer tax charges of 55%. The gross payment to you would be declared to HMRC by the SIPP administrator as an Unauthorised Member Payment.

You will need to find one that will do it though and that is unlikely to be the big players. So you will likely end up with a couple of thousand pounds in costs and then 55% tax on the ballance. Is really worth losing £8000 to get your hands on £5000 cash?

Your high risk investment is a much better idea. Use it as something to gamble with and have some fun. Most SIPP providers will permit that, but not all.

If you want to play the stock market the likes of Sippdeal and Hargraves Lansdown offer free ones ..

[Ruskie]

Thanks for the reply. I have to admit the frustration I feel when looking at dealing with this is immeasurable. As I said earlier it was set up and invested in from being 17 when I was financially naive.

[AdeTuono]

Your fund is producing 6% on low risk. Why drag it out? That's better than an ISA and probably three times what you'd get on deposit.

[fandango_c]

Ruskie said:

Thanks for the reply. I have to admit the frustration I feel when looking at dealing with this is immeasurable. As I said earlier it was set up and invested in from being 17 when I was financially naive.

Why do you think that you were financially naive?

[Ruskie]

fandango_c said:

Why do you think that you were financially naive?

Because of investing in something so inflexible at a young age. At the end of the at 17 you don't know what or where life is going to take you and when you will need a lump sum.

[AdeTuono]

Ruskie said:

fandango_c said:

Why do you think that you were financially naive?

Because of investing in something so inflexible at a young age. At the end of the at 17 you don't know what or where life is going to take you and when you will need a lump sum.

Nor do you know at 27, 37 or 47. Sounds like it's been a sound investment so far.

[Ruskie]

AdeTuono said:

Nor do you know at 27, 37 or 47. Sounds like it's been a sound investment so far.

At the moment it will fetch less than £75 a month so for me that is a pretty irrelevant sum at 65. I won't be adding to it as I now have a NHS pension so its just sat there.

[Ruskie]

Leading on from this after doing some further research...

Self managed Sipp, recipe for wipeout of ability to make the fund grow?

[bogie]

manage it yourself and trade it...if you get lucky you may grow it, look at it like a hobby pot of money

you cant see into the future and may not work for NHS for rest of your life nor may they even be offering a good pension in 20 years

keep it, the longer you can invest it (a lifetime) the better ...you dont have to take a poor annuity at 55 from it