amanda

amanda23_2

I wonder if anyone out there has any advice as I seem to be stuck in a catch 22 situation. With recent pension changes I contacted BA pensions, with whom I had a Final Salary/defined benefits pension from when I worked with them back in the 80's and which I had forgotten about. When they replied, one of my choices was to take a lump sum of £36000,which I chose to do. I jumped through the hoops and followed the Govt ruling by consulting a FA (obligatory for amounts over £30000). The report came back that it was better to leave my money in the scheme. I have chosen to ignore this advice (I have other sources of pension income) and want the money to pay off my mortgage. My FA was sympathetic, understanding my reasons for wanting the money, but said he could not advise me to take it. I then contacted BA who said that it was my choice at the end of the day and that I had done what was asked of me by consulting the FA and as long as I was sure in my mind of what I wanted to do and understood the consequences tthen I could transfer the money out but I still needed the certificate from the FA to say that he had given advice. He is unwilling to provide this for some reason but said he could do me a letter to say I had contacted him for advice and that his advice was to leave the money in the fund. He suggested that I open an a/c with Scottish Widows as, although he could not do it for me, their Retirement a/c was suitable for my needs as I just want to transfer the money to them and withdraw part of it this financial year and part of it next financial year to minimise the tax burden. I thought I was getting somewhere until I phoned Scottish Widows and they said I could open a retirement a/c but I had to open it through a financial advisor, who won't do it for reasons stated!! Did Gordon Brown really mean it to be this difficult for us to get our hands on our money??? Hence my catch 22 situation......I have heard of something called a SIPP but my FA said to be careful with this as they are not really for the novice so where do I go from here? I just want to take my money out of the scheme, as the Govt said in April that I could do. I was given a 3 month deadline date of 23rd August so time is running out.
Any help/ideas would be greatly appreciated as so far all this has done is cost me money to get absolutely nowhere!

dunstonh

My FA was sympathetic, understanding my reasons for wanting the money, but said he could not advise me to take it.

If leaving it where it is works out as the best option financially, then the advice is going to be leave it there.

I have other sources of pension income

But are they better than the BA pension? Could you use those?

He is unwilling to provide this for some reason but said he could do me a letter to say I had contacted him for advice and that his advice was to leave the money in the fund.

He is unwilling because he will carry the lifetime of liability for the advice and currently the trade bodies, liability insurers and compliance companies are telling advisers not to transact on insistent clients.

Did Gordon Brown really mean it to be this difficult for us to get our hands on our money???

Gordon Brown has made it no easier or harder. Your pension is giving you exactly what you signed up for it to do.

I have heard of something called a SIPP but my FA said to be careful with this as they are not really for the novice so where do I go from here?

SIPPs dont make any difference. The SIPP provider is still going to want you to get an adviser to sign off on it.

I just want to take my money out of the scheme, as the Govt said in April that I could do.

It didnt quite say that. The type of pension you have was not the focus of the changes made.

Any help/ideas would be greatly appreciated as so far all this has done is cost me money to get absolutely nowhere!

You need to contact the administrators of the pension scheme and ask them if they will accept a letter from your IFA saying that you have sought advice and although the advice was to leave it there, you have chosen to overule it.

xylophone

Have you tried Aegon, Aviva, AJ Bell?

xylophone

And are the other sources of pension income also DB or if not do they have any guarantees etc?

jamesd

I'm glad to read that your FA appears to have done a reasonable job and told you the correct things to do both as advice and to achieve what you want anyway.

You will need to be able to prove that you took advice so do accept the FA's offer of a letter. Beyond that your next problem is to pick a pension firm that will take a transfer where advice has been given but the person is proceeding against the advice. I provided a list of those in this post.

atush

Personally, I think your IFA was right, and paying off a mtg by cashing in a DB pension is very unwise. Hopefully this little bit of trouble will help you think again? Affter all, if they say dont do it, and we say dont do it, doesn't that mean something to you?

What are your other pensions? DC?DB?

If you have a DC pension, id look there first (but I still would not use it to pay off a mtg at todays rates).

But if youw ant to go ahead, youc an with the letter the IFA will write for you. You just need to choose another provider if the one suggested will not help you.

jamesd

Using pension money to pay off a mortgage is indeed one of the most common pension mistakes, right up there with buying an annuity instead of deferring the state pension with the money. Unless, of course, it's an interest only mortgage and paying with the pension was planned from the outset.

sandsy

The trustees require confirmation you've taken appropriate advice under the 2015 Pensions Act. The financial adviser must provide this as soon as practically possible, according to FCA guidance.


The format of it isn't specified. However, according to tPR guidance, there is no need for that confirmation to state what the advice was, just that you have taken advice.


However, no adviser is required to transact business for anyone who wants to go against the recommendation they've provided. And no provider is required to accept your funds when they too know that you've been told is not in your own best interests. Neither of them want the risk that you'll come back at them if it all goes wrong, blaming them for helping you move the funds in the first place.