Friens Life- pensions freedoms

Robert_Davies21

Friends Life have told me they are presently not allowing people over 55's to withdraw 25% of their pension pot (the tax free element) which is one of the Governments new pension freedoms. Apparently the freedoms are not legally binding on the pension companies! Some pension companies are allowing this but not Friends Life at present. Is there any campaign to lobby the pension companies to allow this? The pension I have with them is worth peanuts per year but a 25% tax free lump sum would come in very handy at the moment provided they don't charge a ridiculous admin. fee.

dunstonh

Friends Life have told me they are presently not allowing people over 55's to withdraw 25% of their pension pot (the tax free element) which is one of the Governments new pension freedoms.

That option has existed since 2006. It is not one of the new options.

Apparently the freedoms are not legally binding on the pension companies!

Correct.

Is there any campaign to lobby the pension companies to allow this?

There have been some misguided media articles but thats about it. Mostly not understanding that products built to do certain jobs and not others should not result in surprise when they are unable to do jobs they were not built for.

The pension I have with them is worth peanuts per year but a 25% tax free lump sum would come in very handy at the moment provided they don't charge a ridiculous admin. fee.

The option you are looking to utilise is called income drawdown. As mentioned, it has been around for the best part of a decade and is available on pensions that offer income drawdown.

The easy and sensible solution is to transfer the pension to one that offers income drawdown.

xylophone

Hargreaves Lansdown SIPP might suit - just remember not to close it in the first year.

greenglide

The pension I have with them is worth peanuts per year

Is the "peanuts per year" already in payment (via an annuity) or is this their or your assessment of "peanuts".

Have you looked into your present fund has any valuable guarantees (a Guaranteed Annuity Rate for example which would give you more "peanuts? or others?).

If you could get the 25% tax free what would you intend doing with the rest? The FL pension product would normally paid the 25% tax free but you would need to decide what to do with the rest, that could be the real problem.

How much is the "peanuts" worth? Have you considered the tax implications?