MSE News: Free pension guidance service branded ‘Pension Wise’

Credit-Crunched

The financial services industry is a very odd one.

I can't see many industries accepting a financial levy paid by companies, to fund a system that is will ultimately take business away from them.

Very odd.

Will the customers be protected by the FSCS?

Will the pension 'guidance' have an culpability if the client mis understands the guidance and suffers a financial loss.

For me this is a very dangerous route to take, as mentioned, a combination of DB/DC schemes, annual allowances, life time allowances etc is not a simple tree diagram to follow.

jem16

Mirador wrote: »

If the new service is to provide information only, then once that information is given, the individual will then still be required, by the pension providers to take professional advice and so will still need to consult an IFA. Right or wrong?

Just like now I expect the providers to still advise you to seek the advice of an IFA and just like now you can choose to do so or not. There will be some occasions, just like now, when an IFA will be required as in a DB transfer.

I don't really expect much change in the advice process.

Mirador

jem16 wrote: »

Just like now I expect the providers to still advise you to seek the advice of an IFA and just like now you can choose to do so or not. There will be some occasions, just like now, when an IFA will be required as in a DB transfer.

I don't really expect much change in the advice process.

Except that you can't choose not to. Both our pension providers, AXA and Aegon refuse to accept any instruction from us. We have to use an IFA to be able to access any funds.
Under the new system will the providers accept instruction if we have used Pension Wise? If they do, then that is going to affect IFA business and of they don't, then what purpose does Pension Wise serve, since they will only duplicate the information that the IFA will also give.

jamesd

What reasons do AXA and Aegon give for refusing to accept instructions form you? What instructions have you tried to give? I'm guessing that you have their product versions that are intended to be resold by IFAs and that they are committed to poor customer service for their real customers, you. Seems like a good reason to transfer out.

gadgetmind

Mirador wrote: »

Except that you can't choose not to. Both our pension providers, AXA and Aegon refuse to accept any instruction from us.

Friends Life are similar and (for example) needs IFA involvement for drawdown. As a result, many people just move to a more accommodating provider when they retire.

To retain customers, particularly with drawdown becoming more common, Friends Life are setting up a more customer/diy friendly platform for people to move to, and I expect other providers to follow suit.

Mirador

jamesd wrote: »

What reasons do AXA and Aegon give for refusing to accept instructions form you? What instructions have you tried to give? I'm guessing that you have their product versions that are intended to be resold by IFAs and that they are committed to poor customer service for their real customers, you. Seems like a good reason to transfer out.

We want to transfer my wife's pension to drawdown. She has an ex Wintherthur policy, now with AXA. When she spoke to AXA, she was categorically told that she cannot do this without using an IFA. No reason given. She even asked if they she could sign some sort of waiver to say that she wouldn't hold them accountable but nothing. Out of interest I then contacted my provider Aegon and had exactly the same response, so, my error, I assumed that it was a legal requirement.

I haven't considered moving the funds, as again I have assumed that all the providers will insist on the use of an IFA before accessing funds.

Just found te notes she made when speaking to AXA last year.
' you are only permitted to move your funds to drawdown if you have taken and can prove independent advice'

Have spoken to AXA again today and rechecked. I have been told that yes, I must use an IFA as it is ”company rules". don't however appear to need an IFA to transfer the funds to another provider, so they are sending me a transfer discharge, which will take 7-10 days.

gadgetmind

If you definitely need drawdown now (and there are good reasons to) then you'll probably have to move to a SIPP provider that allows drawdown, has reasonable fees, and doesn't have exit charges if you need to move again.

Mirador

gadgetmind wrote: »

If you definitely need drawdown now (and there are good reasons to) then you'll probably have to move to a SIPP provider that allows drawdown, has reasonable fees, and doesn't have exit charges if you need to move again.

Transfer discharge form on its way from AXA now, they seem quite happy to lose business.

Thanks for the advice on what to look for in a SIPP provider. I will do some research, but pretty sure that I have seen a spreadsheet on this forum giving info on fees.

mgdavid

Mirador wrote: »

....... I will do some research, but pretty sure that I have seen a spreadsheet on this forum giving info on fees.

yes you did, I've used it too, but don't have the link to hand (sorry). FWIW I have nothing but praise for Charles Stanley Direct; everything is done as efficiently as possible online or by email or phone. I've done transfers from Aegon and Standard Life into the SIPP, both painless and done within two or three weeks. The PCLS then took just a few days. Am currently waiting for Flexible DD to be approved.

jamesd

Good that you finally got the truth out of them. You might also consider making a complaint about the original story that "you are only permitted to move your funds to drawdown if you have taken and can prove independent advice" when that was just company policy and they should instead have said "we only permit...".

It's a pretty common problem for firms not to distinguish between what is their policy and what the law is and complaints about it are one way to contribute to improving the situation.

If you're 55 and might make pension contributions of more than £10,000 in the future it's worth knowing that if you put pots into capped income drawdown now you can continue to take out the GAD limit amount without triggering a reduction in the annual contribution allowance from £40,000 to £10,000. That's currently 6-8% each tax year out of the 75% left after taking the 25% tax free lump sum. How much exactly depends on gilt yield and your age at the time the calculation is done. If you take more than the 25% from a person using the new flexibilities from 6 April 21015 you do trigger that reduction.