Please please help

geddoyle

Mum (61 year old) has just got divorced and has been awarded her ex's pension with company x.

Company x have said that she has to pay them £2500 to keep the pension with them or £1500 to take it out within a four month window (it is now nearly 3 months gone).

She is not sure what to do, so got an independant financial advisor to work out what would be best for her.

Independant financial advisor spoke with company x and was told that in order to find out the in's and out's of staying with company x, Mum would have to pay a further £1500:eek:

This is extortionate and outrageous and obviously Mum is furious:mad: with this - but what can she do - who does she need to speak with?

Martin - anyone? Advice please...

dunstonh

This is extortionate and outrageous and obviously Mum is furious:mad: with this - but what can she do - who does she need to speak with?

Actually its not extortionate and outrageous. The problem is that the transaction is treated as a high risk transaction (assuming it is a final salary pension scheme and not money purchase). The cost of liability on these is very high and the transaction itself requires a lot of work and involves a higher qualified adviser than normal. Hence the cost is higher.

She is unlikely to find many that are much cheaper unless she already has a business relationship with them or there are other business areas which can be used to cross subsidise the fee. I would have put the typical fee in the £1000-£2000 range.

geddoyle

Thanks for your response - Mum has an additional pension (widdowers) with the same company so does have business with them.

Still not being able to know whether it is viable for her to keep her pension with company x seems unbelievable especially when they want £1500, a telephone quote for a pension is far cheaper.

£2500 for a couple of keystrokes to keep a pension which is already on the books with them seems an awful lot and day light robbery as £1500 for more keystrokes to close the pension and to transfer it elsewhere.

Afraid, it still does not answer the question, should she stay or go?

dunstonh

Still not being able to know whether it is viable for her to keep her pension with company x seems unbelievable especially when they want £1500, a telephone quote for a pension is far cheaper.

A telephone quote is not the same thing though. Your mum cant go back and complain it was wrong with those whereas she can with occupational pension transfers as the FSA have said they will work on the basis that the transfer is wrong unless evidence is shown to the contrary.

£2500 for a couple of keystrokes to keep a pension which is already on the books with them seems an awful lot and day light robbery as £1500 for more keystrokes to close the pension and to transfer it elsewhere.

It was £1500 in the last post. Not £2500. It isnt a couple of keystrokes either. Why does everyone think that transactions require no knowledge and are put down to computers nowadays?

Afraid, it still does not answer the question, should she stay or go?

That will cost you £1500

geddoyle

As Mum does not much about all this, it seems best to take the cheapest route and bail out at £1500 (ouch).

Appreciate your comments.

EdInvestor

Do you have any idea of the global sums involved here? Either the approx annual pension or the size of the pot.

If the charge is 1,500 on a 200k pot size for instance, it is hardly extortionate.