Follow up questions on pension transfer

GordB

I posted recently about transfer of funds from a defined benefit scheme. This was due to the opportunity to release a good TFLS and have a decent pot to draw on as needed.
I had informative responses and I understand the requirement to get IFA. In fact on checking my company pension website they require written evidence that I have had advice and the person giving it is registered and qualified. However as far as I can see the final decision is up to the individual.
Now I have seen some comments on this site saying you may struggle to find a company willing to take you on if they feel you are going against advice. Is this correct? Will a company turn down a decent pot of money to invest? Will any advisor ever say its good to leave a scheme that is in reality never ending in favour of one that may run out eventually? Surely this is what pension freedom is all about?
Also if I were to transfer can I put some into my wifes name?
If money is in a drawdown fund are you protected to the 75K limit?
Thanks

kidmugsy

GordB wrote: »

Will a company turn down a decent pot of money to invest? ….

Also if I were to transfer can I put some into my wifes name?

If money is in a drawdown fund are you protected to the 75K limit?

(i) A company will certainly turn down pot of money if it feels that you might turn round and sue them in a few years.

(ii) Wife's name: only if you divorce.

(iii) No, it's not a savings account. How the protection works is one for experts to answer.

dunstonh

. However as far as I can see the final decision is up to the individual.

Correct.

Now I have seen some comments on this site saying you may struggle to find a company willing to take you on if they feel you are going against advice. Is this correct?

Also correct. It is possible to do it with insistent clients but many firms will refuse to transact where the advice is not to do it.

There is a bit of an FCA and FOS conflict with advisers stuck in the middle. FCA has issued reassuring words but not the FOS. The dilemma is that the FCA say its ok to do insistent clients as long as you follow the insistent clients guidelines (note guidelines - these are open to interpretation and it would be the FOS that decides if you did it right or wrong in the event of a complaint to them). The FOS have generally taken the view in the past that an adviser should not carry out a transaction that they know to be wrong for a consumer. So, how could an adviser process a transfer on a pension they have said is best not to transfer? And that is why is putting so many off.

Will a company turn down a decent pot of money to invest?

The amount is irrelevant is its fee based nowadays.

Will any advisor ever say its good to leave a scheme that is in reality never ending in favour of one that may run out eventually?

There are methods used to analyse these things. Its not just a simple guess. However, historically, only around 1 in 10 defined benefit schemes were worth transferring. There has been an increase recently but its still a minority likelihood.

Surely this is what pension freedom is all about?

Pension freedom was about money purchase pensions.

Also if I were to transfer can I put some into my wifes name?

No. Well, not without drawing it and paying the tax making the whole thing pointless.

If money is in a drawdown fund are you protected to the 75K limit?

The deposit protection scheme applies to deposits. Not investments. Investments have their own protection scheme but its different to deposits given the nature of investing. It would depend on the assets you invest in within the pension and whether you used an adviser or not.