Abbey Life Early Exit Charges!

sandsy

According to all the press reports, the FCA need to do this by March 2017 so, at this stage, your best course of action is to wait.

dunstonh

I'm desperate to access the funds in my Abbey Life pension pot, but feel paying a quarter of the pot as Exit Charge/Fee/Penalty rather sharp practice. I therefore contacted Abbey Life directly and found out that regardless of the FCA/Treasury 'investigation' into potentially applying a percentage 'CAP' on Charges they aren't prepared to start this voluntarily.

Abbey Life is a closed company. So, they have nothing to lose.

Also, there are doubts as to whether the law can be changed to override contract law. Plus, some exit charges will be exempt and are quite fair. Even some as high as yours. Although, I dont recall anything special about Abbey Life plans that would make me think its fair.

I then contacted the FCA to enquire about their progress with the matter since the Chancellor's statement and to find out if there would potentially be a scenario (as in the case of PPIs) for 'retrospective' fee refunds.

Highly unlikely. It would be like trying to prosecute someone who drove down a street at 40mph when that was allowed despite it later becoming 30mph. There is absolutely no comparison with PPI.

I have contacted the FCA more than once and they have been absolutely useless regarding this matter, suggesting that it could take 2-3 years to arrive at some kind of agreement with the providers and there would be no 'retrospective' Exit Fee refunds to policy holders. Useless, toothless, institutionalised, passing the buck bunch of snails.

The FCA itself does not have the remit to break contracts. it will either need the firms to volunteer or a change in the law. There are a lot of issues on this and the Government was premature in its response. Although it has led to some reducing charges. So, I suppose it was helpful for them.

radmm0

Thanks for all your responses everyone, especially dunstonh. I think my best chance now is to try to build some sort of rapport with Abbey Life and to ask them to play 'fair' by reducing the exit fee. It's worth a shot in the light of the details from you guys above.

Thanks again.

radmm0

AnotherJoe

radmm0 wrote: »

Hi guys

I'm over 55 and have two small (less than £10k each) Personal Pensions with two different providers from my early days in permanent employment. I have already cashed in one without having to pay ANY exit fees or charges. But, to my horror, in order to cash in the other policy/pension pot, Abbey Life want to charge me more than 25% of the whole pot, which is staggering and frankly outrageous!!

Is it actually a 25% fee? Or a sum which is fixed and happens to be 25% but might be 2.5% if you had 10x as much money in it?

dunstonh

AnotherJoe wrote: »

Is it actually a 25% fee? Or a sum which is fixed and happens to be 25% but might be 2.5% if you had 10x as much money in it?

Normally, AL run with capital and accumulation units. One pays the charges, the other is the policyholders. Over the term, Capital units erode down (usually to zero). If you transfer before then end of the term, the capital units need to be factored into the reduction in fund value.

If someone pays into the pension for a long time, then the ratio of capital units will be very small. However, if someone stops paying into the pension not long after starting it, then the ratio of capital units will be very high.