Protected tax free cash post A-day

itm2

I am looking to transfer an occupational money-purchase scheme from Fidelity to my SIPP with Hargreaves Lansdown. Fidelity have sent me a Transfer Out Quotation which indicates a protected tax free cash amount as at "A Day" on 05/04/2006. While this amounts to about 28.4% of the fund value at that time, it's not clear whether the 28.4% protected tax-free entitlement was protected on an ongoing basis.

I just phoned Fidelity and, believe it or not, they too were unable to tell me. The only thing they could do is request a retirement pack to be posted to me, which would indicate my tax-free entitlement based on today's fund value.

While I'm waiting the 7-10 days for that to arrive I was wondering whether anyone here had been in a similar situation, and whether their enhanced tax-free % had be preserved beyond A Day?

Daniel54

A recemt article I remembered reading in the Telegraph,which may be of some help

http://www.telegraph.co.uk/finance/personalfinance/pensions/11138058/25pc-lump-sum-Some-can-get-100pc-of-a-company-pension-tax-free.html

itm2

Daniel54 wrote: »

A recemt article I remembered reading in the Telegraph,which may be of some help

http://www.telegraph.co.uk/finance/personalfinance/pensions/11138058/25pc-lump-sum-Some-can-get-100pc-of-a-company-pension-tax-free.html

Thanks for the link. Curiously, the information in the article doesn't seem to square with what I am being told by the providers. The article states:
"earlier this year, HM Revenue & Customs introduced new rules to allow savers transferring their funds to hang on to their bigger tax-free lump sums, on the condition that they transfer the funds before 6 April, and take their lump sum before 6 October 2015."

Since I was planning to transfer my pot to HL now, and will be aged 55 on April 6th 2015, this theoretically means that I could retain and withdraw the 28% tax-free allowance before October 2015. But I was told by HL that I would only retain a 25% tax-free entitlement on any funds transferred from Fidelity. The Fidelity Transfer Out Quotation also states that the protected amount "will normally be lost on transfer and tax free cash will be limited to 25% of the fund in the receiving scheme".

So the Fidelity statement is potentially ambiguous, but HL's advice is definitely out of line with the Telegraph article. Maybe I'll phone HL back, quote the Telegraph article, and ask them to re-confirm....

itm2

So I just spoke to HL. They were aware of the new rule, but said that they would only allow the enhanced tax-free entitlement to be preserved if drawdown were to commence immediately upon transfer. Since my 55th birthday is on April 6th 2015 (!) they were not clear on whether this would be possible in my case, and since their systems had not yet been updated to handle the new drawdown arrangements they would not be able to tell me until January.

That's annoying, as I was hoping to take advantage of a £100 cash bonus which HL were offering for pension transfers requested prior to October 11th. They are now not sure whether they will be able to honour that offer, but will need to let me know in January :0(