Withdraw Pension

Garyhow

As per the new Pension Rules I have a small Pension fund (not my main Pension) I wish to take out in April this will clear most of our debts and leave us in a nice position moving forward the question is my financial advisor is asking for £1k of fund to help, this is 5% of fund, am I wrong in thinking this is too much, as he is also looking after our other pensions.

mgdavid

it depends on how much work is involved. As you haven't told us anything at all about the pension you wish to draw on ('cash') then it's impossible to say. Has the IFA told you what he will be doing to earn the £1k? Have you asked for a breakdown?

sandsy

Assuming this is some sort of personal pension with an accumulated pot of money, it might be worth contacting your pension provider directly to see if they plan to allow flexible access from 6 April. If so, it might be possible for you to simply organise this yourself.

dunstonh

am I wrong in thinking this is too much

No, it seems very fair given the high risk nature.

this is 5% of fund,

That is the problem with fixed fees. Cheaper as the amount is bigger. Problem is that £1000 is about the least you can do on a high risk transaction like this.

Garyhow

mgdavid wrote: »

it depends on how much work is involved. As you haven't told us anything at all about the pension you wish to draw on ('cash') then it's impossible to say. Has the IFA told you what he will be doing to earn the £1k? Have you asked for a breakdown?

Not sure anybody knows how much work as Gov not sorted how it's going to work, he is saying there will be a form to fill from pension.
The pension is my serps which was stopped back in 99, haven't contacted IFA / not got a breakdown.
Prudential tell us we will need a advisor and can't do ourselves.
Not sure what is meant by high risk???

dunstonh

Not sure what is meant by high risk???

For an adviser, it is a higher regulatory risk. More likely to suffer future complaints and the FOS takes into account things that people on this website do not. Most of the advisers I know are saying they are avoiding anyone that says they want full fund withdrawal unless it is part of holistic planning.

Prudential tell us we will need a advisor and can't do ourselves.

You should be able to do full fund withdrawal without an adviser after 6th April. Although some providers may need you to transfer out of their scheme into another that allows it.

TH1878

Garyhow wrote: »

Not sure anybody knows how much work as Gov not sorted how it's going to work, he is saying there will be a form to fill from pension.
The pension is my serps which was stopped back in 99, haven't contacted IFA / not got a breakdown.
Prudential tell us we will need a advisor and can't do ourselves.
Not sure what is meant by high risk???

He means the Financial Conduct Authority may come for a visit, pick up your file and ask a lot of tough questions about whether this action was suitable for you or not - the default position is that it isn't.

There will also be around 8-10 hours work involved, at least, in researching, putting a compliant file together, dealing with the administration and meeting you in person. £1,000 doesn't seen excessive to me.

atush

Garyhow wrote: »

As per the new Pension Rules I have a small Pension fund (not my main Pension) I wish to take out in April this will clear most of our debts and leave us in a nice position moving forward the question is my financial advisor is asking for £1k of fund to help, this is 5% of fund, am I wrong in thinking this is too much, as he is also looking after our other pensions.

So 1K is 5% of the fund? So your 'fund' is 20K?

are you 55 or older? Is this a DC pension or a DB pension?

Why cant you just draw the pension after april? 5K tax free and 15K taxed at your highest rate (and is that worth it to you losing this to tax?) ie would the 4-6K in tax paid mean you can't pay off your mtg?

Garyhow

atush wrote: »

So 1K is 5% of the fund? So your 'fund' is 20K?

are you 55 or older? Is this a DC pension or a DB pension?

Why cant you just draw the pension after april? 5K tax free and 15K taxed at your highest rate (and is that worth it to you losing this to tax?) ie would the 4-6K in tax paid mean you can't pay off your mtg?

We can draw pension after 6th April and that is what charge is for, this is for two bad debts which one has CCJ, Mortgage is paid off as of last month, but debts stop any future planning ie re-mortgage, as in low paid job wont go into high tax bkt and we have another pension each for later.


Thanks all for replies it seems we will have to pay charge just thought that on such a small fund 22K was a large fee but most seem to think OK will have to go with it.

xylophone

The OP says

As per the new Pension Rules I have a small Pension fund (not my main Pension)

and

The pension is my serps which was stopped back in 99,

SERPS Protected Rights having become ordinary rights, this is a small DC pot?

What is so high risk about it that it would need the advice of an IFA?

Could it not be transferred out to an insurer who would permit the OP to access his small pot as he wishes?

Or perhaps HL would accept the transfer without advice?

http://www.hl.co.uk/pensions/sipp?theSource=PCHLS&Override=0&adg=G+HLBS+HPN&gclid=CMC7_6ycjcQCFdPMtAod7zEAFg

jamesd

Garyhow wrote: »

Prudential tell us we will need a advisor and can't do ourselves.

There are two different things, the law and the policies and rules of a particular pension firm. Prudential have told you their policy - that they will insist on you having an adviser - not the law, which does not require an adviser at all.

It is possible that this SERPS opt-out policy was originally set up by an adviser so they are just saying this because it's in the adviser only group of products that they offer. If so, you might be able to transfer to another of their products then take the money without advice.

Garyhow wrote: »

Not sure what is meant by high risk???

High risk for the adviser. They will need to put together a financial plan that proves it is the best approach for you to use, else you might later come back to them seeking redress for an incorrect choice.

It's also worth wondering whether taking tax free lump sums from the other pensions might be a better deal than taking it all from this one. If this one has a guaranteed annuity rate that could be far higher than current annuity rates and that may make it better to take some money from the others instead of any from this one.

Your reasons for wanting the money seem sensible, notably given your current lack of access to cheap or even just inexpensive credit.

You don't have to pay the charge and I suggest that you don't. It's easy to save almost all of the money. Just fill in a transfer form for say Hargreaves Lansdown and they will charge you a few hundred Pounds to take it all out. Better still, wait a bit longer and there may be widely known cheaper places for taking out all of the money.