Abbey Life Transfer Value Shocker

Phargus

I've got £40K with Abbey Life in an FSAVC additional pension fund that I'm still paying into. I'm aware that Abbey are closed for new business, that they have high charges and are generally poor performing funds and am considering moving but the transfer value is only £32K. Is a 20% exit charge typical/ reasonable / legal??
Any potential downside to stopping payments and leaving the fund as is and starting a new pension elsewhere?

Anyone else found a good solution for this position?

thanks

dunstonh

Is a 20% exit charge typical/ reasonable / legal??

Its typical and legal of legacy products.

Any potential downside to stopping payments and leaving the fund as is and starting a new pension elsewhere?

No. However, your Transfer value analysis (TVAS) should tell you if its better to transfer or not if the penalty can be recovered by the use of a modern contract with lower charges.

Anyone else found a good solution for this position?

Yes, I have transferred most Abbey ones i have come across with lower total charges over the term being the justification.

Phargus

Many thanks.

Should Abbey Life provide a TVAS?

Just checking what you're saying; more modern contracts could be able to make up the £8K (20%) loss in transfer penalty over 12-15 years (I'm paying in around £215/month gross). Quite a difference!

dunstonh

Should Abbey Life provide a TVAS?

No. The TVAS is something an IFA will do or you need to do yourself if you dont want to use an IFA. Abbey will provide the basic data. Research will provide the rest and in some cases you have to make a judgement call.

Just checking what you're saying; more modern contracts could be able to make up the £8K (20%) loss in transfer penalty over 12-15 years (I'm paying in around £215/month gross). Quite a difference!

Its possible. May not be much in it but its possible. However, only an analysis will tell you for sure.