Implementation of 2015 Pension Rules

BazzerPontefract

Taking uncrystallised funds pension lump sum from stakeholder pot
Has anyone seen examples (from established pension providers) of the process pension providers will operate for the new rules on Direct Contribution (Stakeholder) schemes in April 2015.
My own provider said they'd have details by Mid-?October, but there's nothing been published yet. Anybody seen anything from other providers.
Any URLs, please?

dunstonh

Has anyone seen examples (from established pension providers) of the process pension providers will operate for the new rules on Direct Contribution (Stakeholder) schemes in April 2015.

No. Although it will probably be very similar to existing methods on drawdown.

bmm78

Important to stress that the new lump sum rules are "permissive", which means that there is no requirement for providers to offer them.

It's therefore a question of "if" first and foremost, and then it becomes a case of "when". Ultimately it will be a case of whether it is commercially viable for that particular provider.

I've not heard of a single provider committing to having "pension bank accounts" as an option come April. Each provider needs to look at how this option would be positioned alongside anything else they choose to offer, and what appropriate charges and restrictions would be.

brewerdave

bmm78 wrote: »

Important to stress that the new lump sum rules are "permissive", which means that there is no requirement for providers to offer them.

It's therefore a question of "if" first and foremost, and then it becomes a case of "when". Ultimately it will be a case of whether it is commercially viable for that particular provider.

I've not heard of a single provider committing to having "pension bank accounts" as an option come April. Each provider needs to look at how this option would be positioned alongside anything else they choose to offer, and what appropriate charges and restrictions would be.

But if enough of them ,refuse to operate in this way there will be a lot of upset people rattling politicians' cages come the General Election -I suspect that there will be very heavy political pressure on the industry early in the New Year!!:)

Linton

brewerdave wrote: »

But if enough of them ,refuse to operate in this way there will be a lot of upset people rattling politicians' cages come the General Election -I suspect that there will be very heavy political pressure on the industry early in the New Year!!:)

It doesnt make sense to force a company to offer a product it is not set up to manage, especially a complex one like drawdown. There are plenty of things now which are permissive and not offered by all or in some cases many providers - eg commercial property in SIPPs, some providers dont support the buying of shares in SIPPs, drawdown from obsolete pensions is likely not to be supported.

As with all purchases if your favourite supplier doesnt stock the item you want go elsewhere.

dunstonh

brewerdave wrote: »

But if enough of them ,refuse to operate in this way there will be a lot of upset people rattling politicians' cages come the General Election -I suspect that there will be very heavy political pressure on the industry early in the New Year!!:)

The pension "bank account" is very much a soundbite and unlikely to happen in the way it has been presented. it will almost certainly be very similar to phased drawdown now (as it is effectively the same thing) with a little less paperwork but with timescales similar to investment withdrawals on other wrappers.

For as long as the FCA treat pension business as high risk and phased drawdown as very high risk, providers will not be falling over themselves to take shortcuts.

bmm78

brewerdave wrote: »

But if enough of them ,refuse to operate in this way there will be a lot of upset people rattling politicians' cages come the General Election -I suspect that there will be very heavy political pressure on the industry early in the New Year!!:)

There will be more political pressure on the government who pushed through these changes with no prior consultation and with unrealistic timescales.

Nowhere in the draft pension legislation does it mention or even allude to "pension bank accounts". Even the providers who do offer full flexibility will not be able to meet the expectations created by those words.

Key principles are that these options are permissive, and it will be possible to transfer the fund to a provider who offers full flexibility.

Thrugelmir

brewerdave wrote: »

But if enough of them ,refuse to operate in this way there will be a lot of upset people rattling politicians' cages come the General Election -I suspect that there will be very heavy political pressure on the industry early in the New Year!!:)

So what? Politicians would struggle to run a market stall let alone a complex business. Only the media that's whipping this up into something that it isn't going to be.

brewerdave

Thrugelmir wrote: »

So what? Politicians would struggle to run a market stall let alone a complex business. Only the media that's whipping this up into something that it isn't going to be.

Wholeheartedly agree with you ,having met a few MPs in my time ,I would definitely prefer Delboy to run the economy!
I'm not saying that the idea of the "pension bank account" is a good thing - yes, the press (and George O!) are largely to blame BUT I can see many Tory MPs getting extremely nervous come March if the big boys in the Insurance world are not offering a degree more flexibility to satisfy at least some of the expectations of Jo Public

BazzerPontefract

I don't see what might be the problem for a Stakeholder provider - it is a simple product, they take contributions to policies either as lump sums or regular contributions.
Offering withdrawals from these policies as lump sums or regular payments, is simply the reverse process. I admit there might be personal taxation issues, but is that really an insurmountable problem?

Linton

BazzerPontefract wrote: »

I don't see what might be the problem for a Stakeholder provider - it is a simple product, they take contributions to policies either as lump sums or regular contributions.
Offering withdrawals from these policies as lump sums or regular payments, is simply the reverse process. I admit there might be personal taxation issues, but is that really an insurmountable problem?

And with a quick wave of the hands all problems are solved! Unfortunately running software backwards doesnt work.

No problems are insurmountable, it's more a matter of whether the cost is justified. How much are you prepared to pay in charges to get at your money?