Mum can't get her full pension pot even though she hasn't taken anything

buckster

lol you are funny

hyubh

buckster wrote: »

Jem16 are you an IFA or do you have shares in an annuity company?

While we're on random accusations - was it your influence that led your mother not to draw her DB pension at the scheme's normal retirement age on the (mistaken) assumption it was an investment like a personal pension, so needed further time to 'grow'? If she's been off sick for two years then I doubt she accrued much (any?) more reckonable membership during that time, and as such, partly undid the benefit of staying on after 60 while still healthy.

atush

buckster wrote: »

I understand that the Barclays annual payment may not be classed as an annuity but it basically is the same thing. They keep the big pot and give her a very small percentage each year. Call it what you will.

I call that a guaranteed income for life w/o risk of it ever running out.

I call your attitude here to respected posters, and to your mothers money fairly appalling.

People are trying to explain to you, why doing what you want your mother to do, could be a very bad idea. Btu you want to do it anyway and now are harping on about the price of doing so. The price is high BECAUSE it is possibly a very bad idea.

So if you/she wants to do it you will have to stump up.

Before you accuse me of being an IFA (I am not) I will say if I was I wouldn't touch your mother case with a bargepole.

BobQ

buckster wrote: »

lol you are funny

Buckster, I am not an IFA and have no interest in whether people buy annuities or not.

If (as you appear to be saying) both your mother and father are unlikely to live longer than a few years this may indeed be the best option. But they do need medical advice. A relative of mine had two serious heart attacks 7 years apart and lived 7 more beyond his second. The choice that your mother makes ought to be based on evidence.

But assuming you are right, I think you have been given some good advice about dealing with IFAs. Like you I do not use IFAs with great confidence, but if Barclays will only allow your mother to do this with an IFA doing a proper analysis to confirm you are correct, I think you should consider the point being made. An IFA is unlikely to quietly comply with your instructions unless they are at least convinced that evidence makes it unlikely they will be sued. In short approach the IFA with the medical evidence and let the IFA justify the decision.

xylophone

It will be no problem finding an IFA to take 2% the only problem my mum will have is having listen to the guy rant on about annuities for an hour and a half.

Your mother is paying for advice from a qualified expert in pensions and transfers so it would be a good idea to listen to what he has to say and discuss all options?

I don't see why he should be "ranting" or offering only the option of going down the annuity route.

He should be looking closely at your mother's financial situation as a whole and considering her need for income now and in the future and addressing her concerns for your father should she predecease him.

Financial_Saddler

buckster wrote: »

The original pot (although it is classed as not a pot due to the type of pension it is) was £180k and Barclays said she can have 25% tax free out and then receive £5k a year, so around 4% roughly. She would need to live over 30 years of it growing at a bad rate (has had heart attack and other serious health issue) to get all the money out because the pot still grows when only £5k a year comes out. Annuities are great for IFAs and for insurance companies

I have a Sipp which is on target to enable me to retire in my fifties (just over ten years) and still be a high rate tax payer (as I am now) I make my own investment decisions and have made just over 32% growth this year in my pension. Agreed I have had a blinding year but to be honest, if you read the right books and don't get too emotional with your investments, it isn't rocket science to control your own investments. I intend to help my mother with her investment decisions and if she runs out of money, I will not see her want for anything. She loves her holidays and she wants to have as many as she can fit in before she is too old and tired to keep 'holidaying'

Advisers are 'advisers', not Financial 'tellers' and after speaking to two, they both still think it is a great idea to take an annuity when she would have to live until she is near 100 years old to benefit so it is not an option.

She has already decided to go to the drawdown route so that IS decided after speaking to advisers. My question is.....is there a low cost way of transferring the money to a drawdown other than paying 2%?

If the answer is no, she will just have to pay an IFA and be done with it. Annuities (even at 7.5% rate) may be attractive to some people but not for me or my mother.

A very impressive investment performance and outlook, particularly since you appear to have achieved all of this knowledge, insight, and investment capability within the last 9 months....

I am new to pensions and opened a sipp with Hargreaves Lansdown and have put some cash in. As I'm not sure about where to start I spoke to a financial advisor who basically said that they would invest it into a fund and it would be monitored on a daily basis, all sounds good. My next question was what's the charges for this, now this might be normal but I need to hear peoples views. To input cash into my pension they want to charge me 3% of whatever I put in on an on-going basis and an annual management charge of 2%. Does this seem too much? I'm considering going it alone but am worried about making a total mess of things. Help please
Thanks for the reply. I haven't got the breakdown but the 2% management is the all in charge. I have 10K in a pension so its quite small. There was no mention of the 3% charge being for only 12 months. I was told it was every time money was contributed 3% would be charged. Its seems a lot especially if you intend on putting large amounts in.


A quite incredible achievement in such a short time.

jamesd

A double-take on replies to this seems needed.

buckster wrote: »

She ... has had heart attack and other serious health issue

This is the first bit of key information that has to be considered because reduced life expectancy is one of the reasons that can justify transferring out of a defined benefit pension.

Getting quotes for enhanced annuities can help to justify the move, showing that it will pay even if there is no ultimate desire to actually buy an annuity. The annuities prove the potentially higher income level that can be taken due to reduced life expectancy. Paying an actuary for a personal life expectancy projection might also be useful, something that would probably cost about £1,000 in addition to IFA cost. The actuary can then provide a life expectancy that can be used in planning the appropriate drawdown rate.

An IFA may still be reluctant to endorse a move to drawdown but if that plan doesn't involve drawing at much above the enhanced annuity rate or rate appropriate for an actuaries life expectancy projection then it seems reasonable for an IFA to consider signing off on the transfer.

atush

No, I got that. I agree that in her circumstances she might be one in the 1-10 out of 100 for whom this could be an idea to entertain.

However, there is a spouse to be taken care of, and a process to go thru. And an IFA (if not that same IFA) would be required.

And it also remains to be seen how the money would be invested to provide for the couple in question that would better the 7.5% annuity offered, and it isn't clear if that rate would include indexing or spousal pension?

jem16

jamesd wrote: »

A double-take on replies to this seems needed.

This is the first bit of key information that has to be considered because reduced life expectancy is one of the reasons that can justify transferring out of a defined benefit pension.

James I don't think anyone is doubting that there may indeed be a point for transferring out in this case.

What most people are pointing out is that advice needs to be sought but that it should also be listened to. If an enhanced annuity is the best option it shouldn't be dismissed out of hand.

jamesd

Yes, there's been some discussion of those things but all in the sort of way that our questioner clearly seems to be getting discouraged by. We can do better to explain what is required and why and what options there are than that. It's not so much changing the options as how we present them, since we do seem to have a case here where a transfer out makes sense.