Exiting a Local Government Pension

andyinfo

Hi
I was employed at an FE College and paid into a Local Government pension from 1995 until 2007 when I was made redundant. This pension is now locked and I cannot appear to do anything with it.......

Ideally I would like to cash the entire thing in, even if that meant incurring a large 'fee' which I'm sure it would. I have no intention of working for any local government employer for the rest of my life and am not interested in having a pension. I am looking to live outside of the UK and will always be self employed in one form or another.

Can anyone point me in the direction I need to start this off? I had an interview with Barclays a few months ago but they were scared shi*less and basically told me it would cost 2500 for the 'feasibility' report and they were 95% sure they wouldn't transfer it because LGPs are soooo good they would be accused of mis selling.....

So, primary goal would be to cash it in and someone hand me a suitcase with the cash value of the policy. Chances of that happening...low to zero......

Next, find a company that will transfer my LGP and give me maximum lump sum now (I'm 50) and the rest drip fed.

I've had the sermons on how good these are and how 'other' people would give their right arm for it......I, with sound mind and full acceptance that by the time I am due to receive my pension it won't be there....please don't tell me that couldn't happen....

If anyone has been in the same boat I would be really appreciative of a heads up on how they found a route through this.

God bless ya in advance.

Andy

MikeJones_2

Hi Andy,

Yes, you can transfer your LPGS benefits.

Yes, you can vest immediately as you are aged 50 (note though you'd have to move quick as the minimum retirement age goes up to 55 w.e.f. 6th April 2010).

Yes, you can take a tax free cash lump sum and either a pension or defer the pension.

You simply need to find an IFA that would be willing to do the transfer - explaining what you have said on this post.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

sufisu

You should be able to get information from the Local Government Pension website https://www.lgps.org.uk. I'm just retiring and taking my pension from the LGP scheme 4 years early, for which I'm being charged a 5% penalty.

The scheme normally pays out a lump sum (Pension Grant) plus an annual amount which is paid monthly in arrears but I'm sure if you contact someone through the website, they'll be able to give you chapter and verse.

Hope you can understand what they say. I had to get someone to explain it to me in words of one syllable and my brain still hurt!!

andyinfo

Thanks to the two of you. I had sort of lost momentum after Barclays dead batting it. I'll have a look at IFAs and get the show back on the road.

Thanks again!

Andy

dunstonh

I'll have a look at IFAs and get the show back on the road.

Expect to be told that its unlikely to be in your best interests financially and many will refuse to transact it. Also expect to pay around £1000-£2000 in fees just to find out if it is suitable to transfer or not. If its not (which is probable) then many will refuse to transact it. Some will allow to do it after that but you will probably end up signing many disclaimers that you are doing this against advice and are an insistent client (that reduces your consumer protection and protects the IFA from you coming back later saying they should have told you it was wrong). I would also expect the fee to be increased further it you do transact given the further liability to the IFA.

The FSA take the stance that defined benefit pension transfers are mis-sales unless proven otherwise. They even do this on direct cases now which is why you dont see companies doing it anymore on non-advice basis.

It's not often that you say this about bank advice but in this case Barclays were probably spot on and did the right thing.

QROPs may be an option for you. May not be a suitable option but it is an option.

EdInvestor

andyinfo wrote: »

I am looking to live outside of the UK and will always be self employed in one form or another.

Check out the QROPS scheme,it may provide what you need.

andyinfo

Thanks to the two additional responders for their contributions. I think I may have found a better way than paying 2K+ for someone to tell me they are too scared to execute an instruction from me.

Following 3 previous phone calls to my LGPS provider where I have been told that I have to be 60 to access my pension, yesterday when I pushed further asking for written confirmation of this I was told I could access my benefits at 50......as long as its done before April next year.

I have been told I have to write to my ex employer and seek their approval for me to access my pension early, then apply to the LGPS holder. Much reduced figures obviously but may be cheaper than transferring. I'm now on my 6th IFA who said possible at first then backs out....or more accurately requests £1500-£3000 to tell me it is too risky (for them). It isn't in the slightest risky for me.

Thanks for your help thus far

Andy

dunstonh

Following 3 previous phone calls to my LGPS provider where I have been told that I have to be 60 to access my pension, yesterday when I pushed further asking for written confirmation of this I was told I could access my benefits at 50......as long as its done before April next year.

You can do this but it would require a transfer to a personal pension and that puts you back in the same position (on the assumption that the scheme age is higher and the trustees wont allow earlier commencement)

I have been told I have to write to my ex employer and seek their approval for me to access my pension early, then apply to the LGPS holder. Much reduced figures obviously but may be cheaper than transferring.

And its probable they will say no. Often they go 5 years earlier than scheme age but 10 or 15 and they usually reject unless you have very good reasons.

I'm now on my 6th IFA who said possible at first then backs out....or more accurately requests £1500-£3000 to tell me it is too risky (for them). It isn't in the slightest risky for me.

It may not be risky to you but if its almost certainly financially wrong. An IFA has to give best advice. Its good to see that there is consistency there as 20 years ago it would have been a doddle few you to do it and now claim mis-sale and get thousands from that IFA. even if you were insistent at the time. I know its not what you want to hear but at least you know the position and why.