section 226..do aviva have this correct?

dunstonh

bobbymotors wrote: »

It sounds like he is trying to transfer it from one Aviva product to another Aviva product.


yes that's right - to avoid cash out fees!

How does that avoid transfer penalties?
Does your plan actually have a transfer penalty? (some people assume they have but in reality many dont and with modern plans rarely having entry charges, it is often cost neutral).

Aviva's current main distribution is via intermediaries. That, in most cases, means advisers (but not always). Advisers are wary of recommending transfers out where plans have guaranteed annuity rates that are decent as they are high risk. So, using a direct provider who doesnt care what you do as they are not giving advice means its all your own fault if you get it wrong. Aviva are concerned that you will go back to complain to them when you realise you made a mistake.

bobbymotors

dunstonh wrote: »

How does that avoid transfer penalties?
Does your plan actually have a transfer penalty? (some people assume they have but in reality many dont and with modern plans rarely having entry charges, it is often cost neutral).

Aviva's current main distribution is via intermediaries. That, in most cases, means advisers (but not always). Advisers are wary of recommending transfers out where plans have guaranteed annuity rates that are decent as they are high risk. So, using a direct provider who doesnt care what you do as they are not giving advice means its all your own fault if you get it wrong. Aviva are concerned that you will go back to complain to them when you realise you made a mistake.

Surely if I transfer the fund to another provider and then immediately cash it in there will be a charge from the new provider? Otherwise why would they do it? AFAIK there is no transfer out charge.


The GAR is minimal, about 4.5% from memory.


What providers would do this transfer and let me do what I want please?


thanks for help so far


bob

xylophone

I would be happy to transfer the fund to another provider that does not require me to take advice as Aviva are so obstructive.

It sounds like he is trying to transfer it from one Aviva product to another Aviva product.


yes that's right - to avoid cash out fees!

http://www.ftadviser.com/2015/03/23/ifa-industry/companies-and-people/another-provider-unveils-post-april-pricing-ANAJUYHMqJQJydqxvKaxEJ/article.html might be worth a look.

dunstonh

Surely if I transfer the fund to another provider and then immediately cash it in there will be a charge from the new provider?

No. most providers have had no initial charges for some years.

AFAIK there is no transfer out charge.

so, no charge out and no charge in.

The GAR is minimal, about 4.5% from memory.

That is low but check for indexation. often the lower ones are indexed. Also, whilst there may be a quoted GAR, the providers will often equate that rate to alternative shapes. e.g. single life/joint life, level or indexed etc.

What providers would do this transfer and let me do what I want please?

I cant say as i have to keep it generic and not give responses which could be interpreted as advice. However, Cavendish have a selection of providers you can choose from that you can DIY via them.

jamesd

You also need to get it straight whether there is or isn't a GAR, you've written is and is not now, apparently for the same thing. The difference is significant because as of 6 April 2015 a GAR may require advice if the protected value is over £30,000. If there really is a GAR case you might want to:

1. Complain to them about the incorrect information they initially provided that led to the delay until after the change of law, seeking reimbursement of your previously unneeded advice charge.

2. Argue that the actual value of a 4.5% GAR is nil because it is far less than the inflation-linked 5.8% available from deferring the state pension, and that since the GAR value is nil, advice is not required. Expect this to be a tough course that is likely to require ombudsman intervention at a minimum, because:

a. the law says that some assessment of the value is needed but doesn't say how to calculate it.

b. a low GAR in effect is a tool that locks customers into continuing to pay them, so they will have a business reason for valuing even a worthless GAR at something just to get the lock in effect.

Because of these issues you would in effect have to set a precedent for how to determine that a GAR is in fact worthless because it's hopelessly uncompetitive.

atush

Once I get that far, what is the name of the fund that I want to transfer to? As when I asked about this last time they just said speak to an IFA!

Basically, just asking this question means you DO need an IFA. Or to take the time to educate yourself so you can choose a destination for your funds yourself?

bobbymotors

"You also need to get it straight whether there is or isn't a GAR, you've written is and is not now, apparently for the same thing. The difference is significant because as of 6 April 2015 a GAR may require advice if the protected value is over £30,000"


There is GAR but it is poor- it is 4.5% approx. p.a


This particular one I want to cash in is less than 30K


all I was unable to understand was why Aviva would not simply transfer this small fund into an existing product of theirs and let me draw it out - and it doesn't help being told a different thing everytime I call them: they are useless.

atush

then try writing?

Perhaps those who answer the letters are more informed?

TH1878

bobbymotors wrote: »

"
There is GAR but it is poor- it is 4.5% approx. p.a

On what basis?

From what age?
Single or joint life? If joint life, what % partner's pension will be paid?
Increasing or level? If increasing, by how much?
Is there a guarantee period?

Saying 4.5% is a low rate doesn't tell us anything without the above. The 4.5% could be much more valuable than a 10% rate depending on the options built in.

Don't transfer it without fully understanding what you are giving up.

bobbymotors

4.5% single life, flat rate from age 60.


not very good at all