illustrations are they true ?

billyboggins_2

I retire in June this year (hooray) and have rec'd a annuity illustration of the options open to me on the great day,one of which is a straight annuity one which shows a tax free lump sum plus an annuity ,this after over a decade of being told that no lump sum would be payable because of my GMP(its a section 32 policy with no chance of exporting it elesewhere).My question is" how accurate are the illustrations and from you experience how close do pension companies come to their illustrations ,bearing in mind my retirement date in mid June and the illustration being in mid April ...getting a bit nervous now that the lump sum will magically disappear and its really important to me

dunstonh

I retire in June this year (hooray) and have rec'd a annuity illustration of the options open to me on the great day,one of which is a straight annuity one which shows a tax free lump sum plus an annuity

Depending on what you have requested it will either be an annuity based on current age and values and annuity rates or it will be a projection using future assumptions which will not be current business terms.

My question is" how accurate are the illustrations

Depends on what you asked for and what they supplied.

getting a bit nervous now that the lump sum will magically disappear and its really important to me

How does that option compare with giving up the GMP and going with commercial terms? Would other companies accept the GMP under open market option?

billyboggins_2

How does that option compare with giving up the GMP and going with commercial terms? Would other companies accept the GMP under open market option?

as i understand the situation i am not allowed to give up the GMP and i did not request an illustration it was sent to me automatically i think

xylophone

as i understand the situation i am not allowed to give up the GMP and i did not request an illustration it was sent to me automatically i think

This has been extensively discussed before?

http://forums.moneysavingexpert.com/showthread.php?t=4931511&page=2

billyboggins_2

yes i know its been discussed before and that is why i have come to the conclusion (with the help of you guys and my ifa) that in my particular circumstance this is not an option !

dunstonh

See, I don't understand that. I have done several in recent years where giving up the GMP on transfer was the recommended advice and completed (and checked by external compliance company using a compliance officer with chartered level qualifications) and the transactions were carried out as expected. There was another that accepted the GMP on OMO and others where they were best left where they were.

xylophone

,this after over a decade of being told that no lump sum would be payable because of my GMP(its a section 32 policy with no chance of exporting it elesewhere).

Interestingly, this is covered here http://www.annuity-rates-advice.com/html/article.php/zcid/2241/type/article/finance/Section_32_Annuity

"GMP in S32 Buy Out - without enough money in fund to pay for GMP Annuity

If there is not enough to cover GMP, then all the fund must be used to pay you the GMP amount and the pension provider will make up the shortfall. In these circumstances, there will be no tax free lump sum paid.
Pension Transfer - If there is not enough to cover GMP, it is unlikely that a S32 Buy Out with not enough to cover the GMP will be able to transfer to another pension company as no new pension company would accept the pension transfer with there not being enough in the fund to cover the liability"

However, what this link does not cover is the possibility of foregoing the GMP so as to enter IVPP.

Seabee42

If you transfer to a Personal Pension Plan for instance there is no money purchase protected rights in the receiving plan and as such the GMP element just becomes part of the overall fund. According to HMRC all the receiving plan has to do is advise the individual of the benefits they are giving up and what they are getting for it.

Clearly if the insurance company concerned have to add to your pot to provide the GMP it is hard to believe how you can be better of by transferring but even so I have seen them go ahead.

billyboggins_2

the one thing i can't understand is that for over a decade they have told me that my pot is not big enough to pay my GMP and give me some cash but the letter in April gives me two figures higher than the GMP whether or not i take a cash sum ,we are talking about £102447 in my fund and a GMP of £6327 ...in the recent past they have told me the fund would need to be £127000 or £137000 depending on which letter you believe !

xylophone

the one thing i can't understand is that for over a decade they have told me that my pot is not big enough to pay my GMP and give me some cash but the letter in April gives me two figures higher than the GMP whether or not i take a cash sum ,we are talking about £102447 in my fund and a GMP of £6327 ...in the recent past they have told me the fund would need to be £127000 or £137000 depending on which letter you believe !

You have mentioned an IFA - he should be in a position to explain?

If he can't explain, find one with the relevant knowledge/expertise?

http://www.unbiased.co.uk/advice-on