Lump sum from pension

Despondent

I have a company pension. In January I saw the company pensions adviser and was told that I could take my pension as a lump sum - a triviality payment. I decided to do this as it would mean I could pay my mortgage off and retire. I duly completed all the forms that were given to me and decided to retire on 3 May which I did. After 3 weeks I had heard nothing from the pensions company (Aviva) and so I emailed the pensions adviser to find out what was going on. I subsequently received an email asking if I had ever received any other lump sum payments. I replied that I had when at the age of 60 I received 2 lump sums from 2 previous employers the total amount of these being £3700. I have now been told I cannot take my pension in a lump sum as I have had 2 lumps sums previously and I am only allowed 2 in a lifetime. I was never told this before. This has now put me in real financial difficulties as I still have to pay my mortgage on what amounts to state pension and a very minute payment from my company pension each month. I feel I have been given bad advice and would like to know if I can take any action over this. I am at my wits end over this and don't know who to turn to for any help. Any advice would be greatly appreciated.

somethingcorporate

Did you tell the advisor at the time in January that you already had taken 2 lump sums?

Go and see an IFA if you want independent advice although I am not sure how you have been misled, the rules are the rules.

If you cannot pay your mortgage you will need to seek new employment.

xylophone

http://www.pensions-ombudsman.org.uk/Complaints/Complaint_Form/

You might try here? If you took the decision to retire on the basis of incorrect information and you are now in hardship, you might have a case?

Are you entitled to Pension Credit? http://www.ageuk.org.uk/money-matters/claiming-benefits/pension-credit/

atush

In January I saw the company pensions adviser and was told that I could take my pension as a lump sum - a triviality payment. I decided to do this as it would mean I could pay my mortgage off and retire.

Unless the Pension advisor said "unless you have taken or have other pensions" then they misadvised you. You can only take triviality when considering any and all pensions you have. If he did not enquire or warn you of this, then you may have a case for the ombudsman.

dunstonh

In January I saw the company pensions adviser

Can you clarify what you mean be adviser? The above posts are assuming it is an IFA/FA. However, it may not be. In which case, the responses would be different.

I feel I have been given bad advice and would like to know if I can take any action over this.

it depends on the status of the person you spoke to. If it was an FA/IFA then you would have completed a factfind and been issued with a summary report detailing the advice. You would also have been charged for this.

If it was just a clerical worker at the insurance company then they will only reply to questions as you ask them. No more, no less. They cannot give advice.

if was an employee at pension administrator for a works pension then they too cannot give advice (they do actually have some scope to but nearly always prefer not to so they avoid liability issues).

The term "adviser" is key here. If you didnt seek advice and use an adviser then you cannot complain about "advice" given as no advice would have been given. Just statements of fact or direct answers to the questions you asked.

Can you clarify please.

jamesd

What type of pensions were involved with the previous employers? Defined benefit (like final salary) or defined contribution/money purchase/personal pension? Were they work pensions or personal pensions (and if work, were they group personal pensions)? How long ago did you do it? There is a one year window for some types of pension lump sum from the time you take the first one. So we need the dates with fine enough detail to know whether it was or was not within one year of eachother and whether the first was or was not within one year of when you asked to do it this most recent time.

What type of pension is the current work one?

There is not a lifetime limit of exactly and only two lump sums. The actual limit depends on the specific types of pension involved and we don't know the types of each pension involved, so we don't know which limits have been involved so far.

For personal pensions there is a new rule that was introduced only a year or so ago that lets you take up to two personal pension pots in your lifetime as lump sums - that pair of up to £2,000 that I mentioned in the last paragraph. I don't think you can have used this rule but that is part of why I'm asking about when you took the other pension lump sums and what types of pension they were.

I'm trying to work out whether you have actually used either of the two pot rule limits because there are actually four pots allowed, two for each broad type of pot. I'm worried that you may have mentioned two and someone who doesn't know the rules might have just assumed that you were at the limit without checking further to find out exactly which types of pension and which trivial pot rules were used before.

The Aviva scheme is probably a work personal pension or work group personal pension. Unless you have used the two personal pensions limit one way around that might be to transfer to a personal pension then use one of the two personal pension pots under £2,000 goes. If it's worth more than £2,000 but less than £4,000 you might be able to transfer to two different places then take up to £2,000 from each.

Someone who is at Aviva might only know about the two personal pension pot rule and might be just assuming that your two previous pots were both personal pensions, just because the Aviva one might be.

atush

if was an employee at pension administrator for a works pension then they too cannot give advice (they do actually have some scope to but nearly always prefer not to so they avoid liability issues).

If it was an advisor for the works pension, they should not have mentioned triviality w/o mentioning that all pensions have to be taken into acct when deciding if you are eligible.

The fact the OP based a major life decision on this, means they should have given all the facts or not mentioned triviality at all.

mania112

The way I see it:

Even if that original 'adviser' was an Approved Person (in the eyes of the Regulator) he seems to only have given you wrong INFORMATION rather than wrong ADVICE.

He/She also didn't mis-sell you anything because the withdrawal wasn't able to take place.

jamesd

Unless an annuity has already been purchased from the employer of the person who gave the information, based on that information.

Despondent

Thank you very much for your help, I will make some notes to answer your questions and get back to you. Once again thank you very much for your help

Despondent

Sorry not getting back sooner to let you know the outcome. To cut a long story short. Aviva paid me compensation for giving wrong information after I told them I was going to complain to the FSA, I was also able to pay off my mortgage and am now receiving a sum each month. To the person who said 'get a job', I didn't find your response very helpful, in fact it was quite hurtful at the time. I have worked full time since I was 16 and am now 65 and have never taken time off work for anything other than holidays, I think I have worked enough, hopefully when you are my age you find easy to get a job, you seem to think it is. Once again thank you very much to everyone else for your helpful comments.