Abbey Life Additional Pension for Empolyees

Mainsail

My partner took out an Additional Pension for Employees with Abbey Life while she was working for the NHS in 1996. This policy is part of a Free Standing Additional Voluntary Contribution Scheme registered under Chapter 2 of Part 4 of the Finance Act 2004. The scheme name is the Abbey Life Additional Pension for Employees
(No 1) Scheme.
On the 13 January 2012 she received a letter from Abbey Life stating that “warning – this contract has no cash-in value at any time. How does this affect her being able to cash in this policy to be able to re-invest this money under the chancellor’s pension cash-in policy?

dunstonh

On the 13 January 2012 she received a letter from Abbey Life stating that “warning – this contract has no cash-in value at any time. How does this affect her being able to cash in this policy to be able to re-invest this money under the chancellor’s pension cash-in policy?

You cant cash in a pension.

What you are proposing is commencing the pension and taking the lump sum as a single income payment. If your plans are to reinvest the money then that it probably a bad idea. The investments can be changed without the need to commence the pension.

xylophone

http://www.pistonheads.com/gassing/topic.asp?h=0&f=206&t=1335587&nmt=FSAVC+Mis-Selling

http://www.financial-ombudsman.org.uk/publications/technical_notes/FSAVC.html

The above caught my eye.

If the above is not relevant, what options are available with the FSAVC policy?

Is your wife receiving an annual statement from Abbey Life?

It would seem from the above that the charges are likely to be very high; would a transfer out to a cheaper scheme be available?

dunstonh

FSAVCs no longer exist. In April 2006, they were all reclassified as personal pensions.

xylophone

FSAVCs no longer exist. In April 2006, they were all reclassified as personal pensions.

Or in any event work like them?

http://www.wesleyan.co.uk/glossary/

"Free-standing AVC
This stands for free standing additional voluntary contribution (FSAVC). They were used to top up employers' pension benefits as an alternative to AVC schemes and were arranged through investment firms. Since April 2006 tax-free lump sums have been available from FSAVCs so they work like personal pensions."

Abbey Life don't have much to say

https://www.abbeylife.co.uk/Retirement/Ret%20xGOT.

"Free Standing
Additional Voluntary
Contribution plan
FSAVC A pension product taken out by an individual to ‘top
up’ their benefits from an OPS "

https://forums.moneysavingexpert.com/discussion/1606707

http://www.thisismoney.co.uk/money/pensions/article-2735044/Savers-cash-pension-funds-face-charges-20.html

"Stephen Jensen, a retired customers services manager from Saltash in Cornwall, faces losing 11 per cent of his £13,000 pot with insurer Abbey Life if he moves it - even though he is only four years off the retirement age in his policy.


From next year, the 61-year-old is eligible to take his pot under the new pension rules. He is desperate to leave Abbey Life because management charges of 5.25 per cent are being deducted from the bulk of his fund every year.
He signed up to the pension in 1987 when he started a new job, but remained with the firm for only two years. The value of his fund today is £13,337. However, if today he were to cash it in he would receive £11,973.
An Abbey Life spokesman says: ‘We are reviewing what further changes we need to make to our policies and the options that will be available from April 2015.’
And a spokesman for the Association Of British Insurers adds: ‘Someone saving through their working lifetime in the way the pension provider envisaged will find they are not penalised with early retirement charges.’ "