Implications of 'yes' vote on Scottish Widows annuity?

Annie1960

PuzzledDave wrote: »

I have two pensions in Scottish institutions, they are the overwhelming bulk of my pots, change in tax rates is one issue I'm thinking of - what about minimum retirement age in accessing your private pension ? I can see my dreams of retiring early vanishing in smoke. Or perhaps terms of using drawdown and such ?

Worse still is I suspect I may not hear about such changes until it's far too late. It's not like changes to Ireland, France & the Netherlands pension laws get high visibility in the news - will changes to Scotlands pension laws really get reported in the rUK in 20 years time ? I think not...

Keeping my retirement fund in another country seems insane, I just can't decide at the moment if to stay put with the great firms I am invested with or jump now and not get stuck in some massive queue in case Scotland goes it's own way.

Some very interesting points here, Dave. If you leave it and everyone tries to jump ship (in the event of a Yes vote) will there be enough money left in the Scottish institutions to transfer? Remember the queues outside Northern Rock?

I have a second plan with Standard Life, but I'm happy to keep that invested as they have announced they will move to England if there is a Yes vote. I will take that in a year or two, so I'm not too worried about that one.

Minimum retirement age and other factors such as drawdown are not likely to affect me, but may affect younger people.

Another factor that was mentioned on a discussion programme recently was that, even if there is a 'No' vote, what happens if Cameron holds his referendum about the UK leaving the EU? Scotland may then want another referendum for independence so they could join the EU again.

If I was younger and living in England I would definitely transfer any pension out of Scotland because the uncertainties are too great.

The issue of taking an annuity (which is the stage I am at) is slightly different, but on balance I'm seriously considering taking a lower sum from an English company, it's much less hassle and there will be certainty about issues such as currency and tax.

tony4147

Both my pensions are with Standard Life and Scottish Widows, the SL is With Profits, and I saw an article last week from that a guy at HL said to move With Profits if there is a yes vote.

CLAPTON

Although personally I now hold nothing in any Scottish financial institution (as least as far as I know), it's very likely that after a yes vote Scottish finance houses will set up subsidiaries in RoUK which will be regulated by BoE and transfer all their RoUK business to them.
This doesn't help the Scots know what happens to them currency or tax wise but we will have to wait and see.

Thrugelmir

Annie1960 wrote: »

Some very interesting points here, Dave. If you leave it and everyone tries to jump ship (in the event of a Yes vote) will there be enough money left in the Scottish institutions to transfer? Remember the queues outside Northern Rock?

Northern Rock was holed and sinking. So not the same.

Annie1960

Thrugelmir wrote: »

Northern Rock was holed and sinking. So not the same.

Ultimately it's about confidence in the institution.

grey_gym_sock

a bank run only applies to deposit accounts.

many ppl transferring investments (e.g. pensions) away from a provider won't make them insolvent, because your investments are held ring-fenced - they're not loans to the provider. though the process might take quite a long time, if many ppl are transferring out.

in the event that scotland both became independent, and adopted a separate currency, there would have to be laws passed to determine which accounts, annuities, etc would be converted into which currency. while we don't know what those laws would say, it would be pretty ridiculous if the currency of an annuity already in payment would be decided by the location of the provider. surely the only sensible way to do it would be depending on the location of the annuitant. though for ppl who've lived on both sides of the border, or have homes on both sides simultaneously, the answer still might not be obvious.

CLAPTON

grey_gym_sock wrote: »

a bank run only applies to deposit accounts.

many ppl transferring investments (e.g. pensions) away from a provider won't make them insolvent, because your investments are held ring-fenced - they're not loans to the provider. though the process might take quite a long time, if many ppl are transferring out.

in the event that scotland both became independent, and adopted a separate currency, there would have to be laws passed to determine which accounts, annuities, etc would be converted into which currency. while we don't know what those laws would say, it would be pretty ridiculous if the currency of an annuity already in payment would be decided by the location of the provider. surely the only sensible way to do it would be depending on the location of the annuitant. though for ppl who've lived on both sides of the border, or have homes on both sides simultaneously, the answer still might not be obvious.

Existing annuities are largely based on UK government debt (gilts etc) so one would reasonably expect the value would be based on UK pounds; what they are paid in is less important

Annie1960

CLAPTON wrote: »

Existing annuities are largely based on UK government debt (gilts etc) so one would reasonably expect the value would be based on UK pounds; what they are paid in is less important

I care very much what currency my annuity is paid in!
I want sterling, don't want anything else. Also, there is the issue of different tax rates in the future.

CLAPTON

Annie1960 wrote: »

I care very much what currency my annuity is paid in!
I want sterling, don't want anything else. Also, there is the issue of different tax rates in the future.

yes of course to the person receiving the pension

but I can't see how an annuity provider with their own income in pounds, would wish to take the exchange rate risk by guaranteeing a payment in a foreign currency

System

Annie1960 wrote: »

Is this your guess, or is there an evidence base for this? If the latter, where is this written down?

If the UK had joined the Euro and the Pound didn't exist any more, would you want your annuity to be paid in Euros or a currency that didn't exist?