Santander Retirement Investment Account - Moving Funds Elsewhere

mrsnobody

Apologies if this has been covered elsewhere, I couldn't find anything by searching. My OH started a Santander (Abbey National back then) Retirement Investment Account when he contracted out of SERPS some years ago. There is about £24k in the fund now, growing at a pitiful 0.4% per year.


He has a current pension plan with Royal London which he pays into and was hoping to transfer the Santander funds into this pension, however Royal London advised this is not possible as they will only accept a transfer in from a stakeholder pension.


Does anyone have any idea whether there are other providers who would allow this money to be transferred but without making additional contributions? He has around 18 years to go to retirement age and we feel that this money should be invested somewhere with more potential for reasonable returns.


Very grateful for any advice/help

xylophone

Retirement Investment Account when he contracted out of SERPS some years ago.

Formerly known as a "Protected Rights" policy? PRs are no more so a transfer should be possible?

http://www.cavendishonline.co.uk/pensions/transfers-and-repensioning/ You could ring and enquire?

dunstonh

He has a current pension plan with Royal London which he pays into and was hoping to transfer the Santander funds into this pension

What makes you think the Royal London one is better?

however Royal London advised this is not possible as they will only accept a transfer in from a stakeholder pension.

I'm surprised they accept any transfers in without advice and/or on a legacy plan that is now closed for new business.

Does anyone have any idea whether there are other providers who would allow this money to be transferred but without making additional contributions?

Virtually all of them.

mrsnobody

Thanks very much for the replies. To answer your questions dunstonh


What makes you think the Royal London one is better?


Looking at the fund growth on the Royal London plan over the last few years, it compares favourably with the 0.4% interest that the Santander plan is currently paying. I appreciate that the Santander fund cannot lose value, but with quite some years until retirement, it would seem a better bet to transfer the fund to somewhere with better prospects of reasonable growth.


I'm surprised they accept any transfers in without advice and/or on a legacy plan that is now closed for new business.


Is it not possible to transfer or set up a new pension without advice? We were hoping to do this without advice for the time being - finances are very tight at the moment and we were quoted quite a hefty fee for this. The idea was simply to get better growth for the funds currently with Santander with a view to carrying out a full pension review for both of us in a couple of years time.


I appreciate you taking the time to reply.

xylophone

Is it not possible to transfer or set up a new pension without advice?

Did you check out the link in my previous post?
or see here http://www.hl.co.uk/pensions/sipp/transfer-to-the-vantage-sipp
"You can transfer most types of pension to the Vantage SIPP (the total combined value of pensions being transferred must be £1,000 or more), normally without needing advice. These include:

Old protected rights pensions accrued from contracting out of the State Second Pension or SERPS (State Earnings Related Pension)"

http://www.hmrc.gov.uk/pensionschemes/transfer.htm

https://www.moneyadviceservice.org.uk/en/categories/transferring-between-pension-schemes

dunstonh

Looking at the fund growth on the Royal London plan over the last few years, it compares favourably with the 0.4% interest that the Santander plan is currently paying.

You mention interest. Pension plans do not normally pay interest. However, I have come across a hybrid Abbey National pension plan in the past that used a deposit fund but it had 100% tax free cash entitlement. So, whilst the deposit side was unattractive, the 100% tax free cash entitlement was attractive. So, check your terms before you decide.

Royal London dont retail pensions for new business any more. They do it under their Scottish Life brand. So, that would mean its a legacy pension (old fashioned). Not all old fashioned plans are obsolete but a good many of them are compared to modern options. So, you should consider whether a new plan for potentially both of them could be a better option.

Is it not possible to transfer or set up a new pension without advice?

Yes, if the provider accepts business that way. Not all do.

We were hoping to do this without advice for the time being - finances are very tight at the moment and we were quoted quite a hefty fee for this.

It may be false economy. The last Royal London pension switch I did saved tens of thousands of pounds over the term after fee (and the fee is collected via the pension). It doesnt mean yours will be the same but your attempt to save a fee could result in actually costing you more.

mrsnobody

Thanks again xylophone, I will check out the information in the link you gave. dunstonh - the Santander Retirement Investment Account is, I think, essentially a savings account. A few years ago the rate of interest was around 4-5% but it has dropped and dropped to the current rate of 0.4%. I will look into the TFC though, as that could be an important factor, and also look into taking advice on all of our pensions (still getting my head around how the fees etc. are applied post-RDR, we thought we would have to pay this up front). Thanks again for your help.

wary

My wife has one of these, which she took out when she was about 20 (she’s now 44) with a minimal amount and has rarely contributed since (paid in £1000 in 2006).

I’m attempting to get my head around whether this is a pension or a savings account. Her statements just show a small amount of interest added annually (0.1%) – no AMC deductions. Is it a pension in that any contributions will have 20% added and must be declared on her PTR, and is she bound by normal pension rules as to when/how she can access this etc?

She has no other pension but plans to start contributions (maybe £5000 pa), with a view to withdrawing up to her tax-free allowance each year between stopping work (at 55+) and getting her state pension. Presumably she’d be better off starting a new pension rather than contributing into this policy?

Given that she only has £2500 invested in this legacy Retirement Investment account, would her best strategy likely be to transfer it to a new pension policy (assuming she starts one) or to leave it intact until she is 55?

One final question … her policy is broken down into PR & NPR, with respect to funds total, interest paid … I believe PR (Protected Rights) is related to the S2P. (The most recent statement I have is from Apr 2011.) Does this mean she must have been contracted out of SERPS and that this money was paid into her policy each year ... and this would account for the entirety of her PR fund?

dunstonh

I’m attempting to get my head around whether this is a pension or a savings account. Her statements just show a small amount of interest added annually (0.1%) – no AMC deductions. Is it a pension in that any contributions will have 20% added and must be declared on her PTR, and is she bound by normal pension rules as to when/how she can access this etc?

If it's the plan I mentioned earlier in the thread then its a hybrid pension plan. If will fall under pension legislation but have a higher tax free cash entitlement. It will not be able to be added to.

One final question … her policy is broken down into PR & NPR, with respect to funds total, interest paid … I believe PR (Protected Rights) is related to the S2P. (The most recent statement I have is from Apr 2011.) Does this mean she must have been contracted out of SERPS and that this money was paid into her policy each year ... and this would account for the entirety of her PR fund?

There are no protected rights any more. However, if the pot had protected rights in the past then that would be linked to contracting out. You can have both non protected and protected rights in the same pension.

wary

Thanks for some useful information, as always dunstonh.

dunstonh wrote: »

If it's the plan I mentioned earlier in the thread then its a hybrid pension plan. If will fall under pension legislation but have a higher tax free cash entitlement. It will not be able to be added to.

IIUYC:
1) She won’t be able to make further contributions to this plan?
2) She will have to wait until she is 55 before taking this money without penalty; however she will be able to take an amount greater than 25% out tax free? Do you know what this percentage will be?

dunstonh wrote: »

There are no protected rights any more. However, if the pot had protected rights in the past then that would be linked to contracting out. You can have both non protected and protected rights in the same pension.

IIUYC – she’ll keep whatever was paid in as a result of contracting out but won’t get any further contributions?

As a general question about the old S2P … will whoever did receive money from contracting out in the past be penalised accordingly with the amount of state pension they receive upon reaching that age? Will the calculation take this into account?

xylophone

Is there no original paperwork relating to the plan?

Was there no contact from the company when PR ended?

If you have a statement you have a contact number/address? Your wife could ask for up to date information as to her options?

http://www.boarddigger.com/t-yTE4U1YjpPp/Pensions-Annuities-Retirement-Planning-Pension-Help-Please# There seem to have been quite a few queries about this product over the years.

With regard to the single tier pension, have you seen

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf