Uncrystalised lump sum

maggy50

Can anyone advise me if I was to withdraw all of my pension ( 32000 ) small amount really do I need a financial advisor or a free access to pensionwise to satisfy my provider Aviva.

I am not transferring to another provider and not going on a spending spree so I am confused by the wording on my pack they have sent asking for details of a FA before they release payment .

neilvw

See this article in the Daily Mail:

Some big insurers are so scared of being accused of mis-selling that they refuse to help customers unless they have had formal financial advice. There are specific circumstances where savers have to take guidance for their own protection. These include anyone who wants to take all their cash at once from a pension of more than £30,000, and those with guaranteed payout rates written into their contracts.
But many firms are telling customers they have to see an adviser regardless of circumstances.
A session with a financial adviser will typically cost £500 to £1,000.
Some savers are finding that their particular insurer has a different interpretation of the official rules. Aegon and Prudential require savers to take financial advice before being allowed to sign up to flexible drawdown.
Gary Taylor, 61, was told by insurer Aviva that he could not take his £3,500 pot unless he took advice.
Gary, from Leicester, who ran a knitwear company, was told Aviva would only help him if he had a signed letter from a financial adviser saying he had sought help. But he discovered this would cost £1,000.
Gary says: ‘It seemed to be like a delaying tactic.’ When Money Mail contacted Aviva it apologised and said Gary had been given the wrong information. The company says it will now get in touch with him.
In another instance, a saver with pension assets worth £21,500 was told he would have to take advice. This was because his insurer, Phoenix, believed his pension benefits were above £30,000, even though the actual value of his savings were lower.

http://www.dailymail.co.uk/news/article-3117474/What-pensions-shambles-Revolution-crisis-savers-barred-taking-cash-charged-1-000-just-advice-scandal-worse-PPI.html#ixzz3hJ0UEIkH

You may have valuable guarantees written into your plan - and your pot is worth more than £30k. You can check with Aviva on 0800 158 3470 (Mon-Fri 9-5). It's critical that you consider any guarantees such as guaranteed annuity rates. And also any tax implications, whether you ought to make provision for spouse etc. Get the details of the plan and then ring Pension Wise, is my opinion.

EDIT: It's looking like you MIGHT have so-called "safeguarded benefits" in your pension, and must take regulated financial advice (not just guidance) as the pot is worth more than £30k:

When must an individual take advice to give up safeguarded benefits?

An individual with safeguarded benefits worth more than £30,000 under the scheme must take financial advice before they can:

Convert these benefits into a different form of flexible benefits under the scheme,
Transfer these benefits to another scheme to take flexible benefits, or
Take a cash lump sum in respect of these benefits.

Safeguarded benefits are defined as benefits that are not money purchase or cash balance benefits. This means defined benefits, guaranteed pensions including Guaranteed Minimum Pensions (GMPs) and Guaranteed Annuity Rates (GARs).

Some people may be surprised by the inclusion of GARs in the above list. This is because the benefits are calculated by reference to the guarantee and not just the plan value.

http://adviser.royallondon.com/articles/updates/2015/may/safeguarded-benefits/

If there are such guarantees they should be highlighted in the options pack. Can you see any?

maggy50

I have all the details of the plan it ran the term of guarantee 20 years .
Will contact Aviva and ask them about my query their paperwork is confusing .
Thank you for your help

neilvw

That's no problem. A lot of older Aviva contracts have guaranteed annuity rates - where you can convert £100 of fund into £8-12 a year, say, whereas nowadays you might only get £5 a year on the open market. I suspect you might have something like that, but talk to Aviva and please report back what they say - it may be helpful to others. :-)

dunstonh

I am not transferring to another provider and not going on a spending spree so I am confused by the wording on my pack they have sent asking for details of a FA before they release payment .

Have they said you must have an adviser or are you referring to the page in their paperwork that asks you to supply adviser details if you are using an adviser?

maggy50

Yes DUnstonh
it's the page in the paperwork that states that it is inclusive of all paperwork I need to send .
One documents asks me to sign that I accept the terms .
Another form just asks have I sought advice tick yes or no , provide details as such and the last sentence states if I provide no FA details no money will be paid !!

dunstonh

it's the page in the paperwork that states that it is inclusive of all paperwork I need to send .

If its the usual Aviva pack then its just asking if you have one. Normally the adviser would fill that page in (along with the others). However, if there is no adviser, you dont fill it in.

Another form just asks have I sought advice tick yes or no , provide details as such and the last sentence states if I provide no FA details no money will be paid !!

That is correct. Any money that the plan would have paid as a commission would not be paid out to the adviser but retained by Aviva.

zagfles

dunstonh wrote: »

If its the usual Aviva pack then its just asking if you have one. Normally the adviser would fill that page in (along with the others). However, if there is no adviser, you dont fill it in.



That is correct. Any money that the plan would have paid as a commission would not be paid out to the adviser but retained by Aviva.

Why would Aviva pay commission to an adviser who has given advice on cashing in the pension?

I thought advisers couldn't take commission these days anyway?

neilvw

zagfles wrote: »

Why would Aviva pay commission to an adviser who has given advice on cashing in the pension?

I thought advisers couldn't take commission these days anyway?

The retirement pack presumably includes annuity options as well as a cash-in option.

Advisers can get commission on an annuity sale as long as they have not advised on it. RDR's great, huh?

dunstonh

Why would Aviva pay commission to an adviser who has given advice on cashing in the pension?

its an options pack. Some options can result in commission.

I thought advisers couldn't take commission these days anyway?

Commission still exists on non-advised. You know that from the direct annuity providers (many of whom are IFAs not giving advice).

zagfles

neilvw wrote: »

The retirement pack presumably includes annuity options as well as a cash-in option.

Advisers can get commission on an annuity sale as long as they have not advised on it. RDR's great, huh?

:rotfl:brilliant!