Transferring to another drawdown plan
If you’re considering transferring to another drawdown plan, we’ll be happy to help. Please be sure you understand all your options, and the effect of any changes you make. There are a few things you should think about before you make any decisions.
You should consider speaking with your financial adviser first. If you don’t have one or have any questions once you’ve read this summary, or need any help understanding your options, just call us on 0808 234 2372, or +44 178 644 8844 if you’re calling from abroad.
How your drawdown plan works
A drawdown plan is designed to give you flexible access to your pension pot and control over where your money is invested. You can choose when and how much money to take out, subject to any limit that might apply and therefore help to manage your income needs.
The value of your investment can go down as well as up and you may not get back the amount that you put in.
If you decide to transfer to a different drawdown plan, you’ll have to transfer your whole fund. All future benefits will come from your new plan.
Things to consider before making your decision
To help decide if a new plan is suitable for you there are a few things you should think about before transferring your plan.
- There may be an exit charge for leaving your plan.
- Any guarantees, benefits and options under your existing plan will be lost and this could affect the income you receive.
- There’s no guarantee any new plan will perform any better than your current plan.
- Charges may be higher or lower from those you pay now.
- Transferring out of the With-Profits Fund could result in a market value reduction which can reduce the value.
- It can take time to transfer between plans causing a potential loss of investment growth while the transfer is completed, as your money won’t be invested.
- Transferring to another plan may trigger the money purchase annual allowance.
Protecting yourself from pension scams
According to Action Fraud, the UK’s fraud and internet crime reporting centre, an estimated £1.2bn is lost to investment scams every year. So if you’re thinking of reinvesting the money from your plan, take a minute to find out more, and stay ahead of the scammers. There is also some very useful information available from The Pensions Regulator.
What to do now
Transferring your drawdown plan is a big decision. You should speak with a financial adviser first. If you don’t have one, you can get details of financial advisers on pru.co.uk and selecting ‘contact a financial adviser’. You may be charged for their services.
Give us a call on 0808 234 2372 or +44 178 644 8844 if you’re calling from abroad. We can’t give you advice or make your decision for you, but we’ll be happy to help you understand your plan and talk you through all your available options and their possible implications.
We’re here 8am - 6pm Monday to Friday and happy to help in any way we can. Please make sure you have your plan number to hand when you call.