Case Study Four
3rd January 2012
A client had reached age 60 and wanted to access the tax free cash held within his different pension accounts which he had accumulated over the years. For the present he intended to continue working and therefore had no need for an income from his pensions. After due investigation it became apparent that one of his pension contracts contained guaranteed annuity rates, which is not uncommon with policies started in the 1980's, and therefore our advice was to take the maximum pension with this contract, foregoing his entitlement to any tax free cash as the guaranteed annuity rate was significantly higher than could be obtained on the open market today.
The other pension contracts were transferred to a Self Invested Personal Pension (SIPP) and we were able to negotiate terms which included a set up fee of only £120 plus £60 for each transfer into the SIPP. Once all the money was received by the SIPP, the client took 25% of the collective fund as tax free cash, leaving the balance invested in a range of funds professionally managed within a risk profile he was comfortable with. It is envisaged that he may start to take an income from his SIPP at some point in the future although the timing of this is uncertain, but all options remain open to him including of course purchasing an annuity.
