Can't take Pension Lump Sum. Is this right?

100

Hi Guys, Thanks for all the advice and help. I feel I don't really know much about pensions and things so I'm going to take a couple of days to try and find out all about mine so that I can answer the questions better. I was so choked up when I was on the phone to my pension provider, I think I posted on here too early without knowing all the facts. I'm going to do a bit of homework and contact the provider again so that I'm more informed. Thanks in the meantime for your help.

jamesd

xylophone wrote: »

http://www.thisismoney.co.uk/money/pensionfree/article-3069332/Thousands-savers-locked-pensions-freedom-revolution.html

What part of that did you mean to refer to? Some candidates:

1. It says that advice is required but doesn't say that it has to be followed.
2. It says that some advisers won't sign the forms so turn down the business, presumably where they think that their advice would be don't do it.
3. The "City regulator", whoever that is, says that "firms should look at the size of someone's pension pot today - not what it may pay out in future" and Phoenix was wrong to require advice for a £21,501 pot because they estimated that the guarantee means that it would be worth more than £30,000.
4. Phoenix seems not to have paid due attention to the regulator and was to send an adviser to their customer to give advice instead of complying.
5. Something else.

It's likely that the guarantee that applies at age 65 is really worthless because deferring the state pension when the 60 year old reaches state pension age is likely to pay out more than the guarantee level and that Phoenix is really just being obstructionist to keep control of the money.

It also seems likely that Phoenix is well aware of this and is wilfully continuing to make annuity sales that make their customers worse off than they could be, in spite of the FCA being clear for some years now that it will look at outcomes, not specific rules. Not a firm I'd want to have shares in because I anticipate very large mis-selling bills in the firm's future. Systematically and knowingly making customers worse off is likely to be really bad news. Eventually.

xylophone

What part of that did you mean to refer to? Some candidates:

Sorry, I should have been clearer - it was really just apropos of your previous post - I thought that you ( and perhaps other posters) might have liked to read the article which caught my eye this morning.

jamesd

Thanks. Yes it was interesting. Just wondered if you were making a specific point from it. You have a pretty good line in interesting links that I often appreciate and find interesting.

johnbfan

We had this conversation yesterday with a FA of the company who is administering the occupational pension scheme my husband was in ten years ago. He is now 65. The FA contacted the Trustees of the occupational pension my husband is trying to sort out. They will not allow him to do drawdown, but he can do an annuity or take the pot and put it somewhere else for drawdown.

With drawdown you have to be investment savvy. Know where to put it in order to get the best returns. The value of what is invested can go down as well as up so you have to know the market or be prepared to accept and pay for advice every time. Your pot could run out sooner than you anticipated if you get it wrong.

He told my husband that with an annuity you are paid for life. Life expectancy for a man is 86. If he lives beyond that time they will keep paying him. If he includes me in the annuity they will pay it to me when he dies until I die. He is nine years older than me. My dad is 90, his brother 93, and still going strong. Seems we are long living so they will be paying out a lot longer than the pot would last.

It will cost around £2,500 to free up his share of the pension pot and put it somewhere else that allows drawdown. Then there are ongoing fees each time you want to drawdown money, advice for reinvesting.

Its a minefield.

dave8204

jamesd wrote: »

HL chooses not to accept over £30k without the support of an IFA (won't go against advice) but will take up to £30,000 without advice.

One of the pensions I intend to transfer is a Final Salary one worth £8000 but the HL person I spoke to said I had to get financial advice.Possibly the confusion arose as the other one has a transfer value of £40,000.
I'l get back to them on the smaller one,it sounds as if I didn't make myself myself clear and I can hopefully push ahead with that one.I don't recall seeing anything about the £30,000 "cut off" on their website.

Thanks for the information.

Incidentally I'm currently part way through transferring a Stakeholder pension to HL and finding their staff very helpful and efficient.

None of these pensions by the way exist because of any kind of common sense on my part,all former occupational pensions of old that I moaned incessantly about at the time as a young man when I saw the deductions on my pay slips

jamesd

Also no rule saying that HL can't have changed their policy since I made the original post. Good luck with it!