20% pension charge after 65

nrsql

I'm sure there's more to this but it sounds like as the pension wasn't taken on his 65th birthday Zurich have tied it up for a further 5 years and applied a 20% charge.

http://www.thisismoney.co.uk/retirement/article.html?in_article_id=415167&in_page_id=6

EdInvestor

They can legally do this.His mistake was to do nothing. No MVA reduction can be applied at the pension's maturity date, but if you don't take the pension at that time, and don't set a new maturity date, the insurance company will have to do it for you.Usually they then pick 75 (the date at which annuity decisions must be made) and thus an MVA may then become payable again in the interim.

If you want to delay taking your pension, choose a new maturity date and instruct the insurer.

This usually only applies to With-profits pensions. If this happens to you, complain LOUDLY to the insurer: there have been at least two cases where the insurer has backed off when the policyholder complained.

dunstonh

It doesnt occur often and as ed says, it only applies to legacy with profits pensions.

The letters that would have been sent with the options would have mentioned the 5 year rollover so there isnt a case for non-disclosure. Zurich do state that they received no communication from the policyholder so they were left with little option but to continue it.

This is a bit like your car being overdue for a service but you do nothing. It then runs out of oil and breaks down and you try and blame the garage for not replacing the oil despite being told that it was going to happen. The policyholder is at fault here. That said, there arent many insurance companies that enforce this past age 65 now (they will upto that point) so making a noise is a good idea as it is a minority issue and when that is the case, they usually back down, especially if you have a good reason for disregarding all their post telling you about the options.