Government retirement rules before 55

bigadaj

I don't think what happened was malicious or even particularly misguided given the world as it was then, high inflation and investment returns skewed views on whether transferring out was good, and made this appear far more attractive than turned out to be the case.

Having said that the whole commission set up at the time was totally wrong, with the customer not aware that the vast majority of early premiums just went to paying commission and fees, some people only realising when they stopped paying early and found there was little of their contributions left.

dunstonh

There was nothing remotely OK about people being advised to opt-out, not join or transfer out of good defined benefit pension schemes, and suffering very large losses as a result.

We know that now. We didnt know that then. You had adverts on television from the Govt encouraging it. The critical yields required were well within investment returns and inflation for historic returns up to that point. Many firms insisted on the use of actuaries and would go by their decision. It was seen as a very good idea. Had returns matched the 20 years previous, then it would have been right.

With hindsight and greater knowledge, we now know it was wrong. Yet despite that, look at parallels today. Govt saying people should be able do what they like with their money. People thinking its better to transfer out of their defined benefit schemes. Although this time, it is advisers that are not doing it and ironically getting criticised for being so cautious.

SnowMan

dunstonh wrote: »

We know that now. We didnt know that then. You had adverts on television from the Govt encouraging it. The critical yields required were well within investment returns and inflation for historic returns up to that point. Many firms insisted on the use of actuaries and would go by their decision. It was seen as a very good idea. Had returns matched the 20 years previous, then it would have been right.

With hindsight and greater knowledge, we now know it was wrong. Yet despite that, look at parallels today. Govt saying people should be able do what they like with their money. People thinking its better to transfer out of their defined benefit schemes. Although this time, it is advisers that are not doing it and ironically getting criticised for being so cautious.

For most of the transfers caught up in the pension review there was no comparison at all during the advice process between the defined benefit scheme and the personal pension to give a critical yield that needed to be achieved to match the defined benefit scheme, or completely meaningless illustrations which ignored increases in deferment and payment and spouse's benefits under the occupational scheme. People were just told nonsense things like they could unfreeze their pensions by transferring etc. All that mattered was commission.

There were a small number of cases towards the end of the review period where a comparison had been done at the time of transfer and advice was based on a critical yield. Provided that comparison had been done reasonably, then the sale was deemed compliant, when reviwed even if a calculation at the 'current' time might have shown a loss.

Certainly the government allowing people to opt-out of schemes in 1988, and some of the government adverts at the time were the catalysts that started the mis-selling. But that is like justifying a burglary of someone's house because the householder left the door unlocked.

The reason that the regulators are being very careful about insistent customers is that part of the sale techniques that caused the mis-selling were based on customers signing disclaimers, that they hadn't been given the chance to read (bits of folded paper given to clients to 'just sign here please sir or madam') and without any attempt to explain the disadvanatges of say transferring.

I'm not criticising any adviser who thinks that a client is making a bad financial mistake, who refuses to make a transaction for them against advice. But neither would I be happy with insistent customers being dealt with by disclaimers only and no properly recorded 'advice against'.

wannaberetiree

Just wanted to say that I know when the miss selling of pensions occurred but it took my pension provider until 2000 to sort it out.

Thank you for everyone's feedback.

sav500

I'm quite sure that I can take my RR pension next year when I'm 50. I will drop the pension office an e-mail to confirm.

wannaberetiree

What type of pension do you have?

sav500

A Final Salary pension. I've just checked a note that I was sent from the pensions dept. just after I finished which gave my figures based on my normal retirement date. It then mentions that I can commence the pension any time after age 50 subject to an actuarial reduction. That's what I thought.
I wonder if the OP is asking about former Civil Service pensions?

atush

What is the scheme age?

If it is 60, and you take it at 50 that could be a 50% reduction. More if the SA is 65?

sav500

There will be a 45% reduction if I take the pension at 50. It will still be enough for me to live on.
The original question was about not being able to take pensions at 50. Well, I can.

atush

Well toodles for you, but the OP cant. And I would be in no rush to take a pension 45% reduced