Reassure - ludicrous charges

vet8

My OH has 2 very small pension pots, which were originally with Barclays, now with Reassure. He decided to cash them in under the new rules. Fair enough, but Reassure are going to charge a fee of more then 10% of the pots. The figures are not very high, but even so this is a total rip -off.

Unfortunately, as we have moved and most of our paperwork is still in boxes I cannot lay my hands on the original policy to see if there is an early exit charge, but he has had these policies for about 30 years now.

I must say they have never done very well either, the Financial Adviser, AKA salesman who sold them to him clearly sold him a right pup.

dunstonh

Fair enough, but Reassure are going to charge a fee of more then 10% of the pots. The figures are not very high, but even so this is a total rip -off.

That would only occur if you are doing this before the scheme retirement age.

Given the age of them, it would make them section 226 retirement annuity contracts. The charges were designed for boom/bust economy and an era when people did not take their pensions early and products were far more expensive to distribute and maintain.

Unfortunately, as we have moved and most of our paperwork is still in boxes I cannot lay my hands on the original policy to see if there is an early exit charge, but he has had these policies for about 30 years now.

How old is your OH?

I must say they have never done very well either, the Financial Adviser, AKA salesman who sold them to him clearly sold him a right pup.

So, why were they not moved to something better years ago if you believed this? They are a product of 30 years ago. You shouldnt expect modern standards for things to designed to work in the 80s.

xylophone

https://reassure.co.uk/SiteCollectionDocuments/Pension_Factsheets/Transferring_your_pension.pdf

"An exit penalty may be applied if you transfer your
policy. This is more common when the transfer
happens during the early years of the pension
plan, but some policies have exit penalties until
the policy reaches the selected retirement date.
These are used to recoup the costs of setting up
the policy, which would have been spread over its
full term.
With-profits funds may also apply a market value
reduction (MVR) in poor market conditions. This
aims to make sure customers who stay in the fund
are not worse off because of others withdrawing
more than their fair share."

https://reassure.co.uk/Pages/Your-Retirement/5-years-before-Retirement.aspx

vet8

dunstonh wrote: »

That would only occur if you are doing this before the scheme retirement age.

My Oh is 57 and I suppose his stated retirement age was 60, so I appreciate they will probably charge something, but he cashed in part of his other pension and had no charges at all and I cashed in 2 of mine in their entirety and was charged nothing for either. It just seems a bit rough that this lot are charging SO much.

He did not transfer them because there were very high fees to transfer them and the amounts were so small it did not seem worth the effort.

I suppose my real moan is that the other 3 pension firms we have dealt with have charged nothing and this lot are charging a fortune.

dunstonh

My Oh is 57 and I suppose his stated retirement age was 60, so I appreciate they will probably charge something, but he cashed in part of his other pension and had no charges at all

There can be reasons why another didnt charge. For example, most pensions bought after 2001 didnt have exit penalties (other than the explicit set up cost which would usually be cleared within first 5 years). Most occupational or workplace schemes dont.

A lot of policies set up in the 80s and 90s used to put age 50 down as the scheme age. So, they hit their penalty free point then.

He did not transfer them because there were very high fees to transfer them and the amounts were so small it did not seem worth the effort.

Sometimes taking a step back to take two forward is a good thing. If it had a high penalty and a high annual charge then its possible to work out the breakeven point compared to a modern alternative. Whilst it is too late now for your OH, there may be others who see this and decide to take a look.