protected rights fund

shiredeon

Can somone explain to me exactly what protected rights means and why providers want to avoid it. thanks.

EdInvestor

Protected rights pensions contain money which has been rebated to you by the Government from your National Insurance contributions when you decided to "contract out" of the state second pension (S2P) formerly Serps. The pension you get from the PR fund will replace what you would otherwise have got from S2P.

In what way do you think providers want to avoid it?

If you are referring to drawdown, the reason probably is that they would make more money by flogging you a !!!!!! annuity instead.

shiredeon

Am i right in thinking that it has to buy an anuity for you and your wife, and what if your not married.

EdInvestor

shiredeon wrote:

Am i right in thinking that it has to buy an anuity for you and your wife, and what if your not married.

Yes, and it's supposed to be a unisex annuity as well.

This is the reason for the delay in allowing PR money into Sipps. The DWP is worried that this move will allow people to take single life annuities and some spouses might be left without a pension.

The fact that the reason for moving the money to a Sipp in the first place is to avoid buying an annuity, but rather to do drawdown which will leave the spouse in a far better position when widowed seems to have rather escaped them.

:rolleyes: