Help needed please on draw down

happys

can someone please help me, i have a pension and i am going to take 25% of it and the rest on drawdown, my pension company Aegon have told me if i wish to do draw down, i will need to get a financial advisor,is that true, or if i do an annuity i need no advisor, i have found out that an advisor wants 3% and a further 1% per year if i do draw down,what do i do please as i really do not want to pay an advisor.

dunstonh

Aegon have told me if i wish to do draw down, i will need to get a financial advisor,is that true,

If the pension provider operates its products via advisers then you are required to use an adviser. if you dont want to use an adviser then you transfer the pension to a provider that operates within the DIY market.

or if i do an annuity i need no advisor,

You dont but advisers actually tend to come in with better terms with annuities than DIY. Typically as the commission on DIY tends to be higher than the fee for advisers on all but the smallest pots.

Katychaos

Hi

I am in a similar position.
I am in the lucky position of having no mortgage, a comfortable pot of savings, a final salary pension which will pay out in four years and the forecast for my state pension is good too. My husband's final salary pension scheme will pay out to him next year when he is 60, he will get a good state pension. We have also both built up money in stakeholder pensions, our stakeholder pots are with Scottish Widows.
Our calculations for what we will need to live on show that our pensions will be more than adequate for our needs in the future. We would like to arrange drawdown pensions for the SW's money. Each taking the 25% tax free lump sum and purchasing a drawdown pension. This will bridge the gap we have over the next three years. We have identified that Scottish Widows have a product which will meet our needs. We have looked at other products but came to the conclusion that the SW one was the one which was closest to what we were looking for.
However, SW tells us that we have to take advice from a FA in order to arrange this. My understanding is that this means we pay someone to look at this, arrange to buy it for us and then we pay charges annually for them 'looking after' this.
We have looked at Cavendish to see if we could do this through them, however they are not yet ready to make the arrangements for these types of products. I am pretty cheesed off as all the publicity around pension freedoms seems to suggest that those of us in a position to have money are able to get our hands on it pretty easily - which in my experience so far is way out of line.
Bizarrely I could request all my money (I know tax is an issue so am unlikely to do this) if I did request this I could sign a disclaimer saying I understand the consequences, and off I could trot to by that Lamborghini ......................not.
So here I am wanting to take advantage of the pension freedom and the only way it would appear that I can do this is to pay someone to look at all the things I have already looked at, pay them annually (in addition to the pension provider charges which will be applied), and then I can liberate my money.
I fully understand that because of the problems in the financial markets in the past that there must be regulation, and that for some (many?) people there is a need that they have advice on financial investments. However there is no information in any of the publicity I have seen so far that informs people that they may not be able to access their money without paying money to a financial adviser.
Thoughts anyone?

kidmugsy

Your rant about freedom is ill-judged. The government removed legal restrictions; wisely it didn't insist that every provider had to check through every old scheme and change it accordingly.


I must say that your tale baffles me. If SW are messing you about transfer the money to someone else. What is this product they have that uniquely meets your needs?

dunstonh

We have identified that Scottish Widows have a product which will meet our needs.

Not often SW come out top on anything nowadays. So, whilst they have a product, it may not be the most suitable product.

We have looked at other products but came to the conclusion that the SW one was the one which was closest to what we were looking for.

Interesting, what has SW got that you think makes them best?

owever, SW tells us that we have to take advice from a FA in order to arrange this. My understanding is that this means we pay someone to look at this, arrange to buy it for us and then we pay charges annually for them 'looking after' this.

Yes and no. If you use a provider that retails via an adviser then you pay the adviser fees for the advice they give. This could be one off basis or it could be an ongoing basis depending on what service you are after.

If you go DIY, then you put it with a provider that caters for the DIY market.

We have looked at Cavendish to see if we could do this through them, however they are not yet ready to make the arrangements for these types of products.

That is because the products they offer on their limited panel are basic products.

I am pretty cheesed off as all the publicity around pension freedoms seems to suggest that those of us in a position to have money are able to get our hands on it pretty easily - which in my experience so far is way out of line.

I challenge you on that point as there are plenty of DIY providers out there who offer what you need. You have tried two sources. One tied provider option and another retailer of basic products. That is hardly shopping around. Its more like going into an Apple shop and a pound shop and deciding that no-one sells the product you want.

So here I am wanting to take advantage of the pension freedom and the only way it would appear that I can do this is to pay someone to look at all the things I have already looked at, pay them annually (in addition to the pension provider charges which will be applied), and then I can liberate my money.

As said, that is not correct. But also, note that the charges on the product provider will be lower via an adviser than an old commission based product from years ago as they had the adviser charges built into them whether you used them or not.

I fully understand that because of the problems in the financial markets in the past that there must be regulation, and that for some (many?) people there is a need that they have advice on financial investments.

IFAs handle over 70% of the pension market. So, the distribution is biased towards IFAs. However, the DIY market is growing all the time and is perfectly capable of meeting your needs if that is what you want.

However there is no information in any of the publicity I have seen so far that informs people that they may not be able to access their money without paying money to a financial adviser.

No information is required on that front because it is not the case.