MSE News: 'Second line of defence' for pension savers to be introduced 28 January 2015 at 1:27PM in Pensions, Annuities & Retirement Planning 63 replies 4.9K views

Former_MSE_Helen

"Additional protection for those accessing their pension pot from April is to be introduced, the FCA has announced..."

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'Second line of defence' for pension savers to be introduced



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zagfles

Presumably it won't be compulsory to answer these questions? The state of my health or how much I drink or other income I have is none of my pension provider's business.

Paul_Herring

In its letter, it says that as a "second line of defence", from April providers will be required to ask those looking to take out their pensions about key aspects of the circumstances that relate to the decision they're making.

And will "mind your own effing business" be an acceptable answer to give to those asking, unlike the banks who I've (apocryphally heard) can refuse to let you withdraw your own money from your own accounts if they "have concerns" (legitimate or not.)

If not, I have major concerns about this.

Pincher

So what is the pension provider supposed to say?

Your 35 year old girl friend doesn't need cosmetic surgery.

You don't need a new kitchen/conservatory.

Even taking the money out to buy Pension Bond is a bad idea.
The 4% is an election bribe, so what happens after 3 years?

I think a £20,000 round the world cruise will be a fairly common outlet. I know, I want to take the money out to buy shares in cruise companies. No, no, no, no, too risky.

atush

No, did any of you read the article?

They will say, if you withdraw x then you will have to pay y% tax or more? they will give general warnings about running out of cash, tax to be paid on taking the money out, and will refer you to the free guidance?

jamesd

The specific requirements and questions are not yet known because the FCA board has not yet decided what they are going to be.

Here are links to the FCA press release and letter to CEOs.

Paul_Herring

atush wrote: »

No, did any of you read the article?

They will say, if you withdraw x then you will have to pay y% tax or more? they will give general warnings about running out of cash, tax to be paid on taking the money out, and will refer you to the free guidance?

"Guidance"? That's a laugh.

Anyone hear MoneyBox on Saturday? They're going to employ people who know less about the new pensions stuff than most of the (non-financial-industry included) regular contributors on this sub-board.

And none of those are questions - they're just re-stating the (current) situation.

So in answer to your (implied) question - I know all that stuff, I know the guidance isn't going to be worth the time spent on it, and it's none of the pension-companies business what I plan to do with my pension fund (providing of course, they don't change the rules yet again before I hit 55.) I do not appreciate having to answer 20 questions just to obtain my own funds.

gadgetmind

Paul_Herring wrote: »

They're going to employ people who know less about the new pensions stuff than most of the (non-financial-industry included) regular contributors on this sub-board.

Yeah, but we're all a bit weird.

And BTW, that's official as our company IFA and company secretary both told me I was weird for knowing so much about this stuff!

Ectophile

zagfles wrote: »

Presumably it won't be compulsory to answer these questions? The state of my health or how much I drink or other income I have is none of my pension provider's business.

Bear in mind that if you're thinking of getting an annuity, the more nasty life-shortening medical conditions you have, the bigger the pension you will get.

Lots of people lost out on their pensions under the old system because they just went with their existing pension company for the annuity, and the company had no incentive to ask about medical conditions.

zagfles

Ectophile wrote: »

Bear in mind that if you're thinking of getting an annuity, the more nasty life-shortening medical conditions you have, the bigger the pension you will get.

Lots of people lost out on their pensions under the old system because they just went with their existing pension company for the annuity, and the company had no incentive to ask about medical conditions.

It makes a bit more sense if they asked such questions when purchasing an annuity, but not when you're just taking money out of a pension.

nearlyrich

I have been saving for my pension since I was 28 with a plan to retire from work at 55 I have a reasonable amount of money in the plan plus about the same in ISAs (stocks and shares) I actually have a plan about how to spend it and I think I know better than my pension provider what I want from it. I understand tax implications and I reckon I can get away with not paying any or very little by managing the funds in the same way I built them up very carefully. I will take the 25% tax free lump sum and that will keep me going for a while...