Need some help understanding an old with profits pension

minnie29

Yes that is what I was thinking so here is a scenario.....
I have already decided that I am taking the whole amount in cash in 2016 I know that I will have to pay 20% tax on the 75% after I have taken the 25% tfls.
So lets pretend it is 2016...
Ican take £12,329.48 and all the tax involved or I can use the transfer amount of £21,5689 , transfer to another provider and even with charges and commission I would still end up with more than £12,329.48?? Or I am being stupid?? Thanks to anyone who can give me an input.

xylophone

I should think that you will need to confirm your understanding of the facts with RL and get a reply in writing.

See https://www.gov.uk/transferring-your-pension/overview

You need to confirm the TV, ask about the benefits you would lose on transfer, ask whether transfer out would be permitted and what charges (if any) RL would impose.

You would need to find another scheme to accept the transfer and ask whether their systems will facilitate your taking the pension as you wish.

There are details in the link about sources of information.

You might also find that HL might be able to assist?

http://www.hl.co.uk/pensions/sipp/transfer-to-the-vantage-sipp

minnie29

Thank you xylophone, that is very good advice will update the board when I have spoken to RL tommorrow,at least I now have some good questions to ensure I get the right information.

agarnett

I am amazed that so few of those who profess to be IFAs, and who pick the threads they wish to comment upon have deigned to contribute to this one.

In fact only one poster has engaged in the nearly 24 hours the post has been up!

What the OP has here is a highly typical situation. Is it outside the knowledge of a typical IFA?

I will add my two-pennorth as someone who has a similar policy with Friends Life.

Before you cash it in, make sure that there has been no shenanigans over the years with the insurer trying to get their hands on substantial parts of the With Profits fund you are invested in. If you have got the box full of documents, check to make sure that there have been no attempts at "reattribution" (AXA, Sun Life Equity and Law, Commewrcial Union, Norwich Union, Morley, Aviva are names that spring to mind but the list is not exhaustive).

Check to see if there have been any takeovers or merged funds and then report back here with anything you don't understand. I won't be able to answer much, but their are hoards of regulars here who were responsible for selling With Profits and made significant commissions doing so, so I expect they will help you ... (we live in hope)

If you just cash it without checking it, that's a bit like going into the local bookies and drawing out your £20,000 accumulator winnings by taking their word that it is only £20,000, and also then leaving without counting it or making sure you still have your shirt on your back.

minnie29

some good points there thank you, from what I can gather CIS is now under the RL umbrella from 2014. CIS have paid no annual bonus on with profit pension funds for at least 3 years (possibly more) and any final bonus is dubious, however as I will not be keeping the policy to the end which is when I am 60 that is just an observation not anything I would be factoring in to my final decision thank you

mgdavid

agarnett wrote: »

I am amazed that so few of those who profess to be IFAs, and who pick the threads they wish to comment upon have deigned to contribute to this one.
.........

whether an IFA or not, I surmise that one reason is because the OP has categorically stated ' I am taking the cash as a lump sum next year'. They are not asking for guidance on how to analyse whether this is a financially prudent or sensible thing to do (which is what IFAs are good at), just asking mainly about the 'how to' and 'how much' which can be found by talking to the provider in normal business hours tomorrow.

minnie29

oh dear, yes correct I am not asking for guidance as to whether this is the sensible thing to do as clearly in the main it is not, all I wanted to ask is does anyone out there understand why there is such a big difference in the figures bearing in mind I have already spoken to the provider and the initial contact was as confused as me and could give me no explanation, and I know there a lot of experts on here that may have come across this before, I am sorry if experts only answer questions on guidance rather than specifics. Will update board tommorrow with outcome of conversation with RL, and at least I have some relevant questions to ask Thank You

agarnett

mgdavid wrote: »

... how to analyse whether this is a financially prudent or sensible thing to do (which is what IFAs are good at)...

I'd surely be interested to see the evidence for that rather wild and completely over-generalised assertion. Would those IFAs be amongst the group of "advisers" who matured and as more senior industry players let their customers' with profits products all get driven into the buffers and generally pilfered ? Or is that another completely over-generalised construct?

I have a feeling one is more true than the other.

mgdavid

agarnett wrote: »

I'd surely be interested to see the evidence for that rather wild and completely over-generalised assertion. Would those IFAs be amongst the group of "advisers" who matured and as more senior industry players let their customers' with profits products all get driven into the buffers and generally pilfered ? Or is that another completely over-generalised construct?

I have a feeling one is more true than the other.

and I have a (stronger) feeling that whatever is said it will not influence your vitriolic embittered attitude.

agarnett

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Let's be fair - IFAs over the years have been very good at taking cash and in concealing conflicts of interest, and very bad at coming back to review old products which still pay them renewal commissions but which they blame us for not reviewing ourselves when we complain.

The With Profits situation generally is another market scandal and all practitioners within the market should be ashamed.

If IFAs were truly independent they would be constantly speaking out against the deliberate damage that has been wrought on With Profits funds by those entrusted with their husbandry.

But of course every 'independent' knows which side the bread is buttered so they say nothing, or worse, they obfuscate.