SIPP Problem, redundant and AXA Pension.

ajw1100

Please bear with me, this is my first post!
I am 60 and was made redundant at Christmas. In 2006 my IFA advised I lump most of my various pensions into a SIPP, I asked that I wanted 'safe and secure'.
So far over £100,000 of my SIPP has gone into liquidation, (Hardly safe and secure) so I am investigating whether I may have a claim against my IFA, I feel the whole thing has a bad smell about it. I always trusted my IFA and this has made me very dubious about getting another one at the moment!

I am hoping that the smaller balance of my SIPP will pick up in the next few years although the largest part has gone.

I had a pension that I paid directly from my salary to AXA, there were 3 parts, an opted out from SERPS, one from my salary and one from my employers contribution. AXA have now combined these into one policy with a single contribution. and an investment allocation rate of 105%.

Now, my question, would I be better setting up a standing order from my savings to AXA to continue this pension or start a new penion with another company, if the latter which gives the best bearing in mind I will hopefully be 65 in 2013?

dunstonh

So far over £100,000 of my SIPP has gone into liquidation, (Hardly safe and secure) so I am investigating whether I may have a claim against my IFA, I feel the whole thing has a bad smell about it. I always trusted my IFA and this has made me very dubious about getting another one at the moment!

When you say gone into liquidation are you referring to a guaranteed equity bond?

There are some issues on these at the moment and investigations are ongoing. Whilst ultimatly your IFA is responsible for the advice given, most consumers are not actually blaming their IFAs. They are blaming the product provider. After all, when you put the FSCS investment protection on your literature you expect it to apply. I have never been a fan of GEBs so I have managed to avoid these but I do have sympathy for the advisers involved as effectively the information supplied and the risk ratings available for them did not give any indications of the risk.

an investment allocation rate of 105%.

Is that to offset a bid/offer spread of 5%? A number of legacy plans do this to make them more stakeholder compliant.

Now, my question, would I be better setting up a standing order from my savings to AXA to continue this pension or start a new penion with another company

Maybe. Maybe not. It would depend on how you want to invest the money, what the AXA policy offers (some did have guaranteed annuity rates for example) and what features, options and charges are applicable to you. I would also want to know where this combining came from.

I suggest you work with your IFA and not against them. There are lobby groups working on this and your IFA can keep you informed and will no doubt be working to put pressure on directly and if a network member, with their network. If its not a GEB then can you let us know what it is.

EdInvestor

Some Sipps were caught in the Kaupthing Singer & Friendlander closure in the IoM.

ajw1100

Thank you for your replies, part of my SIPP fund was invested in a property company which went into liquidation late last year, the director of this company seems to be a close colleague of my IFA. Another part of my pension was invested with another property company which also went into liquidation shortly afterwards, I have now discovered the director of this property company was also the same director of the other company. Not long after I found my IFA had also gone into liquidation.

One paragraph I forgot to add to my first post;

On top of this I was made redundant which is why AXA has amalgamated the pensions I had with them, as there is no salary to continue I can either continue funding this myself from savings, freeze it or sell it to another provider. Not being up on these matters and not having an IFA at present I thought I would ask here.

Any basic advise appreciated, but in general this subject is way over my head

EdInvestor

ajw1100 wrote: »

Thank you for your replies, part of my SIPP fund was invested in a property company which went into liquidation late last year, the director of this company seems to be a close colleague of my IFA. Another part of my pension was invested with another property company which also went into liquidation shortly afterwards, I have now discovered the director of this property company was also the same director of the other company. Not long after I found my IFA had also gone into liquidation.

Oh dear. This looks like a potential fraud in addition to misselling.

You'd be wise to contact these people with a view to making a complaint: https://www.fscs.org.uk

On top of this I was made redundant which is why AXA has amalgamated the pensions I had with them, as there is no salary to continue I can either continue funding this myself from savings, freeze it or sell it to another provider.

It will remain invested even if you don't put any more money into it, so there's no actual need to do anything about it at present if you feel it's done reasonably.

When do you plan to start drawing income from these pensions?

ajw1100

Thank you Edinvestor. My thoughts exactly, I have sent a letter of complaint to my IFA who now has 8 weeks to reply. I will then take the matter further as my wife and I must take every step we can to recover this loss.

I do not intend taking any pensions for as long as possible, I can use savings until I reach 65. I was thinking of putting an additional £100 ~ 250 pm into the AXA pension as they advise this would give me £120 ~ 300 being non taxed. I guess this is more beneficial than putting it into a Bank savings account!

As to whether it's done reasonably compared to others I do not have a clue, there have been many changes over the years and various amounts paid in so it will be difficult to work it out. I was asking if it would be beneficial to me to continue with it adding £XXX pm or start again with a new pension but with only a few years to go until I 'may' take the pension this may not be a good idea.

I have taken my cash ISA allowance this year so I cannot add anything there, is there anything else I could/should be thinking about?

I will look out some local IFA's and ask for an initial 'free' consultation, unbiased.co.uk have some IFA's listed but is there anything I should look out for, my main requirements are for savings and pensions advice, there is no mortgage or other debts so I just need to make the most from what I have now.

Thanks again.

EdInvestor

ajw1100 wrote: »

I do not intend taking any pensions for as long as possible, I can use savings until I reach 65.

What is your thinking here? Are you looking to use the pensions as a form of "'life cover" just in case?

I have taken my cash ISA allowance this year so I cannot add anything there, is there anything else I could/should be thinking about?

There is the other half of your ISA - the stocks and shares part, another 3,600. You can invest this in the same types of assets as are available in pensions. Income and capital is tax free and accessible, unlike pensions. If you decide to do this, use a discount broker such as https://www.h-l.co.uk to open the ISA, which will rebate charges.

What is your tax position at 65 (and that of your wife)? Will her tax free allowance of around 10k p.a. be fully used? It could be better to put any pension savings in her name while you max out your stocks and shares ISA over the next 5 years.

ajw1100

Quote:
Originally Posted by ajw1100
I do not intend taking any pensions for as long as possible, I can use savings until I reach 65.

What is your thinking here? Are you looking to use the pensions as a form of "'life cover" just in case?

Looking at the market values of my investments at the moment is depressing but will hopefully recover over the next few years, so I feel its best to leave these be, my Maxi ISA's which I have purchased each year through Fidelity since 2003 have all fallen in value but again I hope they will pick up as well.
My IFA advised I put the majority of my pension fund into this SIPP :mad: around £155.000 worth, with the loss of around £105,000 this leaves £50,000 in a pension plus the smaller AXA pension of around £27,000. My logic, if that's the right word, is to leave things to pick up but do what I can with my savings to either increase these or use the savings in any way that will help me later. I will of course have to be sure that whatever I do now will incur the smallest risk that I can.

What is your tax position at 65 (and that of your wife)? Will her tax free allowance of around 10k p.a. be fully used? It could be better to put any pension savings in her name while you max out your stocks and shares ISA over the next 5 years.

Sorry, I am not sure what you mean by the above, my wife is about to take early retirement due to personal reasons, so I guess we will both be in the same position, except my wife will be drawing on a pension and I will have no job and be living off savings! I would think that my wife will not have used her tax free allowance as she does not have much in savings.

There is the other half of your ISA - the stocks and shares part, another 3,600. You can invest this in the same types of assets as are available in pensions. Income and capital is tax free and accessible, unlike pensions. If you decide to do this, use a discount broker such as www.h-l.co.uk to open the ISA, which will rebate charges.

I had never heard of this system until I found this excellent website:D I think I saw an article on the subject here yesterday so will have a read later, in the mean time any relevant points I should specifically look out for?

If you think my logic is wrong, please feel free to say so. I appreciate your taking the trouble to help me.

EdInvestor

Logic looks good, I would tend to leave things as they are at the moment and focus on the complaint and getting compensation for your loss.