Market Value Reduction ???

w5moss

About 15 years ago, I took out a pension with what was then Allied Dunbar. I was advised that if I nominated a retirement age of 50, this would prove to be more flexible in that I would have the option of delaying taking the pension, or taking it at 50. It was agreed that I would most probably not take it at 50, but there was nothing to lose. A colleague recently mentioned that if I choose to delay buying an annuity at the specified retrirement age - ie 50 - (which is highly likely) I will be penalised by this market value reduction. I am 40 now, so I'm just thinking ahead. What's my position now? Can I renominate the retirement age - can I claim to be ill advised by Allied Dunbar - Do the pension providers have discretion over this or is it a tax affair. To be fair, I have not yet asked what the Market Value reduction would be, so do not know the consequences, but I', annoyed that I was not told it may be a disadvantage to nominate a retirement age that I have no intention of sticking to. Does anyone have any experience or advice on this?

EdInvestor

Market value reductions only apply to pensions invested in With profits funds.Is your pensions in such a fund (fairly unlikely at AD I'd have thought)?

It is true that you can can get caught with an MVR ( or possibly other penalties) if you change a Normal Retirement Date, which is the point at which insurers will pay out your benefits penalty free.

So it's better not to do that.

n

whiteflag_3

w5moss wrote:

About 15 years ago, I took out a pension with what was then Allied Dunbar. I was advised that if I nominated a retirement age of 50, this would prove to be more flexible in that I would have the option of delaying taking the pension, or taking it at 50. It was agreed that I would most probably not take it at 50, but there was nothing to lose. A colleague recently mentioned that if I choose to delay buying an annuity at the specified retrirement age - ie 50 - (which is highly likely) I will be penalised by this market value reduction. I am 40 now, so I'm just thinking ahead. What's my position now? Can I renominate the retirement age - can I claim to be ill advised by Allied Dunbar - Do the pension providers have discretion over this or is it a tax affair. To be fair, I have not yet asked what the Market Value reduction would be, so do not know the consequences, but I', annoyed that I was not told it may be a disadvantage to nominate a retirement age that I have no intention of sticking to. Does anyone have any experience or advice on this?

get decent advice from a professional rather than rely on what appears to be an ill informed colleague.

would you go to the same colleague if you were ill?

Thought Edinvestor of all people would know Allied Dunbar does not have a with profit fund, which makes MVAs impossible not unlikely.

ffacoffipawb

w5moss wrote:

About 15 years ago, I took out a pension with what was then Allied Dunbar. I was advised that if I nominated a retirement age of 50, this would prove to be more flexible in that I would have the option of delaying taking the pension, or taking it at 50. It was agreed that I would most probably not take it at 50, but there was nothing to lose. A colleague recently mentioned that if I choose to delay buying an annuity at the specified retrirement age - ie 50 - (which is highly likely) I will be penalised by this market value reduction. I am 40 now, so I'm just thinking ahead. What's my position now? Can I renominate the retirement age - can I claim to be ill advised by Allied Dunbar - Do the pension providers have discretion over this or is it a tax affair. To be fair, I have not yet asked what the Market Value reduction would be, so do not know the consequences, but I', annoyed that I was not told it may be a disadvantage to nominate a retirement age that I have no intention of sticking to. Does anyone have any experience or advice on this?

You won't be able to take the pension at age 50, because when you are 50 in 2016, the earliest age that you can retire will have increased to 55 (with effect from 2010).

EdInvestor

whiteflag wrote:

Allied Dunbar does not have a with profit fund, which makes MVAs impossible not unlikely.

As I thought.