25% lump sum question

bbruce

dunstonh wrote:

A S226 with 33% goes to 25% after April. Also many 226s have guaranteed annuity rates which are very high and make more sense taking as annuity. These can kick in or increase at certain ages so a little research would be required.

Seems to me like a retrospective rule. Good old Gordon Brown - he gets my vote - for eviction that is!
One of the reasons I took out a rash of 226s was because of the imminent change to 25% for the new Personal Pensions.
Well, I have a couple of months to do my research. If the GAR is generous, it may pay to take 0% LS, if not take 33% before April.

dunstonh

Well, I have a couple of months to do my research. If the GAR is generous, it may pay to take 0% LS, if not take 33% before April.

If it has a good GAR, the taking zero lump sum is a often a good idea. Also note that it is best not too leave it too close to tax year end as these things often require a few weeks work. Especially with some of the insurance companies.

I understand your point, but I still am not sure of why they just didn't inform me of the possible avenues I could follow, when I reached 50 years old.

Too many possibilities to list and it isn't their job to. They take instructions from the client or advisor.

caveat_emptor

pro_bono wrote:

dunstonh,
I understand your point, but I still am not sure of why they just didn't inform me of the possible avenues I could follow, when I reached 50 years old.

Regards

No and neither can I. Don't know which company you're with but I would have thought it would be good practice to set out the options which is not the same as giving advice.
I've just received an A-Day update from my pension company setting out the changes and I wouldn't consider this advice. It's what we pay our charges for.

whiteflag_3

caveat_emptor wrote:

No and neither can I. Don't know which company you're with but I would have thought it would be good practice to set out the options which is not the same as giving advice.
I've just received an A-Day update from my pension company setting out the changes and I wouldn't consider this advice. It's what we pay our charges for.

I think you will find that pension companies will not send out retirement options until 6-8 weeks before the retirement date chosen when the policy was set up.

Given that the benefits can be taken anytime between 50 and 75, is it realistic for pension companies to keep sending out retirement options.

EdInvestor

Does anybody know why none of the aforementioned companies were not pro-active and inform me that I could do this??


<i>They are not allowed to provide advice. It is your responsibility to seek advice on these issues. They are just providers of the products.They are not being difficult. If they were caught, it could lead to big fines and potential suspension of licence.</i>


Insurance companies are certainly "allowed" to provide advice, and some do so via their tied agent salesman all the time. Others don't - they go through IFAs.

If you contact them and ask questions and refuse to go through an IFA they will usually provide a "consultant" (ie freelance salesperson/adviser under contrract to the insurer) to provide you with some advice if you are already a customer.

But they don't see it as their job to inform you of the options available with the products you've purchased ( except when you reach the retirement date stated on your policy as whiteflag says at which point they will send you an annuity type document as required by the FSA. ).

It's up to you - or your IFA- to keep up to date on everything else , they think.

dunstonh

Insurance companies are certainly "allowed" to provide advice, and some do so via their tied agent salesman all the time. Others don't - they go through IFAs.

They are only allowed to give advice if they have the structure in place to do so and that is registered with the FSA. The three companies are Allied Dunbar(Zurich), Standard Life and Scottish Widows. Neither Standard life or Scottish Widows operate a salesforce and the Dunbar/zurich salesforce is fragmented and ownership of clients is probably messy as hell.

If you contact them and ask questions and refuse to go through an IFA they will usually provide a "consultant" (ie freelance salesperson/adviser under contrract to the insurer) to provide you with some advice if you are already a customer.

Without FSA authorisation to do so, you will not get advice. If no advice authorisation exists, the best you can hope for is to get off the call centre (who would be totally useless in most cases) and get through to someone else in a department related to the class of business you are dealing with. Even then, it will still be factual information and may only relate to options available through them and will still not be advice. It would almost certainly be insufficient in most cases.

It's up to you - or your IFA- to keep up to date on everything else , they think.

Insurance companies have been closing their salesforces down because it is too expensive to give advice. It is quite right then in that case that they pass the responsibility for advice to those that are licenced and qualified to give it. If you want to do it yourself, you can. You don't need to get advice to do it. But if you do need advice, it is quite correct that the advisors are the ones giving it.

pro_bono

Dunstonh, Whiteflag,EdInvester.
I appriciate the time spent with your comments and replies, IFA here I come.

Thanks.

Regards