Pension transfer???

circus_48

Hi All.

My wife has a pension from an old Safeway occupational scheme. She left their employment in 1998, she is 46. It is currently with capita hartshead and is dormant. We could do with some money and have been in contact with some pension transfer companies and need some views on what has been offered.

firstly, one comapny states they will give us £28K ( the pension pot is worth £70K), take 25% for themselves and reinvest 35% on our behalf.

Secondly, another company has said they will transfer the pension to a SIPP and ,as a referal fee, give s £6250.

Obviously the prospect of getting our hands on some cash is great to lower our mortgae payments but I am interested in the views of anyone here who may have done the smae thing or been offered it.

She has another pension that is is currently paying in to which is a final salary scheme with the NHS.

molerat

Most of those schemes are at worst scams and at best against HMRC rules. They are un regulated and you risk losing all your money and / or face a punative tax penalty. The referral fees are against regulations. There is no legal way, with a few medical exceptions, to access the money before age 55.

sleepless_saver

Have a look at the sticky on this board called "Can I cash in my pension?"

dunstonh

It is currently with capita hartshead and is dormant.

Pensions do not go dormant.

firstly, one comapny states they will give us £28K ( the pension pot is worth £70K), take 25% for themselves and reinvest 35% on our behalf.

illegal scheme. Would see you hit with an HMRC investigation at some point and the penalties that go with that as well as having to return ALL of the money to the pension.

Secondly, another company has said they will transfer the pension to a SIPP and ,as a referal fee, give s £6250.

That would be classed as an unauthorised payment under HMRC rules and see you subject to fine and penalty.

Obviously the prospect of getting our hands on some cash is great to lower our mortgae payments but I am interested in the views of anyone here who may have done the smae thing or been offered it.

You are asking if you can commit fraud by using scam companies. yes you can. However, once HMRC have the information (which takes a couple of years typically), you will realise what a foolish mistake it was to knowingly enter into a scam or illegal contract.

RichandJ

These scams have also recently been found to be illegal.

Leaving in 1998, I suspect (but don't know) that this may well be a final salary scheme anyway in which case if Capita are even halfway competent should require an IFA sign off to transfer. You won't get one.

You also say it's "dormant". If it's a FS scheme that is unlikely.

Have you recently requested a transfer value or is it definitely a money purchase (aka defined contribution) arrangement ?

circus_48

Hi. Thanks for the feedback. When I say Dormant, I mean it is not being paid into. I recently had a valuation from them at £70K. It seems these offers are too good to be true as expected. The prospect of getting our hands on some much needed money was a welcomed thought. Oh well, back to the drawing board. Thanks for all the opinions and feedback. I will not chance pistols at dawn with the tax man..after my wife and children he is the most important man in my life!! :-)

RichandJ

circus_48 wrote: »

Hi. Thanks for the feedback. When I say Dormant, I mean it is not being paid into. I recently had a valuation from them at £70K. It seems these offers are too good to be true as expected. The prospect of getting our hands on some much needed money was a welcomed thought. Oh well, back to the drawing board. Thanks for all the opinions and feedback. I will not chance pistols at dawn with the tax man..after my wife and children he is the most important man in my life!! :-)

Hopefully you've avoided pistols at dawn with HMRC, they have bigger guns and each one you shoot down is replaced by another.

You might be better off for planning purposes asking how much the wife's pension is as if she reached the schemes retirement age this year & how much it is estimated to be at normal retirement age for that scheme.

circus_48

Hi.

Another question. Can we take a loan out against the pension?? There is a company who say they can loan against it, no tax and it is interest free - we only pay back the amount borrowed!!! ???

I would be interested in your thoughts on that avenue.

Thanks

warwicktiger

Someone is offering you an interest free loan? I'd like one of those, just think, what is their angle? Why Would they do that?

Pensions are non-assignable, in plain English you cannot be forced to hand over any payments to another party.

I am concerned for you, a pension with a current "pot value" of £70,000 is clearly a valuable asset, please do not sign up to any of the schemes you have described. Go and see citizens advice, get professional financial advice. We could all do with some "extra money" but remember there is no such thing as a free lunch!

circus_48

Yes, I know and it may seem like desperation but it isn't. We have other pension schemes and well sorted for the future but, we want to make the present a little more bearable..if that makes sense. We are loaded ( relatively) on paper, it's just the monthly demands that could do with easing. I wont go in to anything blindly and will take advice.

warwicktiger

circus_48 wrote: »

Yes, I know and it may seem like desperation but it isn't. I wont go in to anything blindly and will take advice.

Good, pensions are there for a reason, and raising cash in middle age is not the reason!