The Pension Loophole article discussion

gadgetmind

Ah, I was also missing the VAT.

I think the income payment charge could be challenged as surely you didn't take an income?

Tipper

A cautionary tale, I've come unstuck with the MSE pension loophole and would welcome some advice on what to do next.

I opened my SIPP in August with £8,000 and the tax relief of £2,000 was added in October. When I sent in my request that I would like to take my pension as a lump sum under the government's triviality 'small pots pension benefits' allowance, they wrote back saying that my estimated total benefits are greater than the current small benefits limit of £10,000 and that therefore this option is not available to me.

I think that the damage was done when a few days after I paid in the £8,000 they added around 30p of income reinvestment.

Help, any ideas what to do next? How do I get my money back?

conkerer

Best-haha-Invest rogues!
Like others I feel very abused by the fees charged. I put in £8,000 and have been paid out, after closing the account, in two amounts totalling £7,585.09. So I've lost £414.91.
They charged me: £100 for payroll for my first payment, £150 trivial payment + VAT, £125+VAT for closure and £100 payroll on the second payment. Total: £510
I've been taxed at 27.98% so I might receive 7.98% back from HMRC which would amount to £574.56 putting me slightly in pocket.
What a hassle though-even if I get it.
I'm sure Martin Lewis, if he becomes aware of this, will feel that the scheme he advocated has gone rather awry.
I think we've been mis-sold.

jem16

conkerer wrote: »

I think we've been mis-sold.

I assume you mean mis-bought as you made the choices yourself.

Looks like this post at the start of this thread has been very accurate.

dunstonh wrote: »

We have been told by our compliance company to not advise people to use the loophole. This is mainly fear of accusation of mis-sale. Something that MSE doesnt have to worry about.

Some providers have said they will not be issuing products or allow their products to be used for using the various so called loopholes either as HMRC has said that if they will close down areas of abuse.

johnfthetraveller

jem16 wrote: »

Looks like this post at the start of this thread has been very accurate.

"Originally Posted by dunstonh : We have been told by our compliance company to not advise people to use the loophole. This is mainly fear of accusation of mis-sale.";

The only problem with the scheme, (when done through Bestinvest), is their extortionate fees. However, if I'd got the same advice from a company, that I got from Martin, I would feel that I was mis-sold, as their research was poor (as was mine - I thought if Martin approved, I didn't need to do my own) not to spot the fees problem.

Dunnit

So you ignored the advice of Dunstonh an IFA in Post 3.
Martin's "advice" first para "Whether you go ahead is entirely up to you." Caveat emptor.
"Our remedies oft in ourselves do lie"

jem16

johnfrith wrote: »

However, if I'd got the same advice from a company, that I got from Martin, I would feel that I was mis-sold, as their research was poor (as was mine - I thought if Martin approved, I didn't need to do my own) not to spot the fees problem.

The problem is that you didn't get "advice" from Martin. You got a piece of journalism written by two people with no financial qualifications or experience. The fact that it was endorsed by Martin should have no bearing either as he is also a journalist and not a Financial Adviser.

The article itself is littered with caveats such as;

While every effort's been made to ensure this article's accuracy, it doesn't constitute advice tailored to your individual circumstances. If you act on it, you acknowledge you do so at your own risk. We can't assume responsibility and don't accept liability for any damage or loss which may arise as a result of your reliance upon it.

and

Yet we would suggest that you think carefully before doing this. Certainly if you're going to do it, do it carefully, as it is complex - and understand that there's a risk.

yet you chose to ignore that and also the advice from an actual Financial Adviser on this very thread.

There are always charges with investments. If you are going to DIY then you must do the research yourself and find out what those charges are.

Unfortunately for you, you tried to take advantage of a loophole and failed due to a lack of proper research. You can have no complaints of missold against anyone but yourself I'm afraid.

conkerer

jem16 wrote: »

The problem is that you didn't get "advice" from Martin. You got a piece of journalism written by two people with no financial qualifications or experience. The fact that it was endorsed by Martin should have no bearing either as he is also a journalist and not a Financial Adviser.

I take the point. However Martin is not just any journalist. He has a well-founded reputation as a (in lay terms) "financial adviser".
My point about mis-selling is aimed at BestInvest as they have allowed me to enter an agreement that is detrimental to my interests. I think that is a sufficient ground to go to the financial ombudsman.

jem16

conkerer wrote: »

I take the point. However Martin is not just any journalist. He has a well-founded reputation as a (in lay terms) "financial adviser".

Unfortunately, just like the Icesave debacle a few years ago, that will get you nowhere. He is a journalist with an interest in finance.

My point about mis-selling is aimed at BestInvest as they have allowed me to enter an agreement that is detrimental to my interests. I think that is a sufficient ground to go to the financial ombudsman.

I doubt you will get anywhere with the Financial Ombudsman. I would expect that BestInvest have all their charges laid out correctly. If, as you said earlier, you get a tax rebate from HMRC you are not out of pocket so what exactly are you claiming?

conkerer

jem16 wrote: »

I doubt you will get anywhere with the Financial Ombudsman. I would expect that BestInvest have all their charges laid out correctly. If, as you said earlier, you get a tax rebate from HMRC you are not out of pocket so what exactly are you claiming?

A very trenchant defence of the sceptic's position!
However it is a big "if" to see whether I get some tax back. Also the inept manner in which BestInvest have handled matters (no communication unless I called; two separate payments from a company with a different name; arcane charges; a statement which is baffling...).
As you say the Ombudsman may reject my complaint but I think there are some grounds.