'new pension freedom'

Your_Hero

SomeUser wrote: »

Under transitional rules, you can tax the tax free cash now and leave the rest until next year. This only came out at the end of the consultation in July.
From hmrc here http://www.hmrc.gov.uk/pensionschemes/newsletter64.pdf

And this might be a bit clearer http://www.professionalpensions.com/professional-pensions/news/2356075/hmrc-publishes-guidance-on-transitional-arrangements-for-pension-freedoms

The transitional rules allow it, but the providers do not have to facilitate this, particularly for closed business companies. Essentially the transitional rules allow someone to take the PCLS now but delay the decision of he remainder funds, i.e. entering drawdown or annuity purchase, until October 2015 latest as if it had never been paid.

Windsor Life, like many older pension providers, will most likely not allow this due to the cost of implementing as their systems were not built for drawing benefits in this way.

http://www.hmrc.gov.uk/pensionschemes/pension-flexibility.pdf
Page. 4 covers this slightly and mentions the need to transfer to another provider if not offered by existing pension.

SomeUser

It sounded like you meant admin fees... If you had a policy with Windsor Life and it's got exit fees (i.e. for taking or transferring it it before your normal retirement age), you've got a very old product and it sounds like you could have a Guaranteed Annuity Rate (GAR). If your policy does come with a GAR then taking it all as cash at any point is probably not a good move.

I strongly suggest that you get advice or at the very least, speak to TPAS before you do anything.

Thrugelmir

JennyF wrote: »

incidentally, I was just going to say, that it seems odd that lenders 'have the flexibilty to decide what they offer' despite these new guidelines. it seems to beg the question why on earth would any provider actually choose to release funds early when they weren't obliged to?

Imposing a huge cost burden on a future generation of pensioners benefits no one. You are looking at the matter from a personal perspective. Others maybe happy to maintain the status quo. There's nothing stopping you transferring the funds out to another provider.

atush

JennyF wrote: »

incidentally, I was just going to say, that it seems odd that lenders 'have the flexibilty to decide what they offer' despite these new guidelines. it seems to beg the question why on earth would any provider actually choose to release funds early when they weren't obliged to?

but they aren't lenders are they? They are pension providers?

JennyF

atush wrote: »

but they aren't lenders are they? They are pension providers?

yes that's what I meant!

JennyF

SomeUser wrote: »

It sounded like you meant admin fees... If you had a policy with Windsor Life and it's got exit fees (i.e. for taking or transferring it it before your normal retirement age), you've got a very old product and it sounds like you could have a Guaranteed Annuity Rate (GAR). If your policy does come with a GAR then taking it all as cash at any point is probably not a good move.

I strongly suggest that you get advice or at the very least, speak to TPAS before you do anything.

I'll check if it has a "GAR". what I understand is there is a 'fund value' and a 'transfer value'. the fund value is payable at 60, but prior to 60 one would take the transfer value, whether you take it early OR transfer it elsewhere.

JennyF

Thrugelmir wrote: »

Imposing a huge cost burden on a future generation of pensioners benefits no one. You are looking at the matter from a personal perspective. Others maybe happy to maintain the status quo. There's nothing stopping you transferring the funds out to another provider.

I think that the thing that might prevent transferring the funds out to another provider would be incurring an additional set of early redemption fees. I'm sure that's probably not the correct term, but so far it would seem that would be the disadvantage to transferring the funds, rather than simply waiting until april 2015 to take out the entire amount.

SomeUser

Fund value and transfer value indicates being invested in a with profits fund. I don't know much about the Windsor Life product to be able to comment on it, but if you are invested in a WP fund, then even more reason to get advice.

(With profits funds are quite complex and not very transparent, basically when the fund does well, profits are held back and vice versa. You get different types of "bonuses" each year, usually.)

JennyF

having just scanned the documents it seems there is a guaranteed annuity rate, but only for 5 years.

SomeUser

There wouldn't be early redemption fees from another provider. I don't know of any pension product that has early redemption fees, unless you were to invest in another with-profits fund. Most WP funds are closed to new money.