Transferring to Drawdown

REDSHOES

My husband is 59 and has an old pension with Royal London (formally CIS) and is transferring this to a Drawdown pension. This is from when he opted out of SERPS. The pension is currently for £57000 and has a GAR attached. Royal London have advised my husband he needs an IFA to agree the transfer.

He accessed a company called pensionreports.co.uk who appeared very professional and competent and advised him that this was doable and they would get an IFA to contact him - this process was started last October and my husband has spoken to an IFA on 2 or 3 occasions in December and January who said he was happy to deal with the transfer process. He was satisfied with both our private and state pension forecasts and my husbands wish for the 25% tax free lump sum with the rest to go into drawdown. My husband accepts there is a cost to this

We are now becoming concerned as this process seems to be taking forever. Whenever my husband phones pensionreports they advise him that they are pushing his transfer forward. That it is complicated since the new legislation came into force in April 2015 - and his case is made even more complicated because of the GAR. The IFA has completed the short report? and is finalising the long report? That sometimes the pension companies use delaying tactics when transferring.

There is always some sort of hold up. Although pensionreports say his case is a high priority and they continue to push the case with the IFA. My husband has contacted Royal London who confirm that the company have requested transfer packs and several valuations - apparently they need to be updated every 30 days. The last contact with pensionreports was a week ago and they said they would try and get the forms out for my husband to sign within the next week. They said that a transfer can now take up to 6 months from start to finish and they apologised for originally giving us unrealistic expectations. Up to today he has received nothing. The whole process has taken 6 months so far. Is this normal? I am now starting to worry that this company are not legitimate although I have investigated it as far as possible and everything appears above board

We would be grateful for any advice regarding this

Regards

Linton

mmm - the pensionreports.co.uk website was set up 2 years ago. The address of the person who set up the website is a 3-bed terraced house near Nelson. pensionreports.co.uk isnt recorded in the Financial Servces Register as far as I can see and so would appear to be unregulated.

I cant find pensionreports.co.uk on the companies database. though there is a pensionreports ltd (which may be nothing to do with it) in Hampshire which looks like a one-man band. The website doesnt give the name of any other company who might own it. pensionreports.co.uk's address appears to be a serviced office, the website provides no other verifiable address. Why did you go to them rather than directly to an IFA? I dont think they can do anything you cant do yourself. How much are they chargng you? To where are they proposing to transfer your pension?

Do you know the value of the GAR? It is possible that it is sufficiently generous for the IFA to be unable to recommend the transfer.

Linton

Just found their company name - Robinson Smyth Ltd. Its given under "Privacy Policy". They arent on the Financial Services Register.

REDSHOES

Hi Linton. Thanks for responding.

We accessed them online as Royal London advised us we needed an IFA as the amount is over £30,000 and because of the GAR. We would have done this ourselves if we could have. I don't know the value of the GAR as the information we have received from Royal London states that my husband will not benefit from it as he has not reached 60 and have given a valuation without it.

Pensionreports.co.uk did not give us an actual amount for their services just an estimate that we were happy to go ahead with as we thought this was a necessary expense.

I am starting to feel very uneasy about this

Linton

But if he didnt take the drawdown what would the GAR at 60 be? Have you checked that your husband wont be seriously losing out for the sake of 1 year?

From what I have found out so far, I would be tempted to find a local IFA who you can talk to directly and who would more certainly be acting in your best interests.

How did you come to use pensionreports as, as far as I can see, they have no IFA authority whatsoever?

AnotherJoe

Cancel the whole transfer immediatly. . Almost certainly it's a terrible financial decision even without involving some dodgy firm you found on the Internet.

Then find out what the GAR will be when he's 60. Then post here with it.

LXdaddy

I have no knowledge of pensionreports.anything so can not comment - they may be perfectly responsible and act in your best interests or not.


Generally speaking it is a bad idea to transfer from a pension fund that carries some form of guarantee as the guarantees have some value that will be lost when you transfer.


This is why you need to consult an Independent Financial Advisor before making a transfer. The stress is on the word Independent.


Your current pension provider must be able to disclose the terms of the Guarantee so that it's value can be assessed. An IFA would be able to do this.


There is a high chance that the value of the Guaranteed Annuity Rate will be higher than currently available annuities and that might easily exceed the value that you could achieve through drawdown.

REDSHOES

Hi

I have just rung pensionreports who advise me they don't have to be regulated. It's just the IFA who does. They are going to get the IFA to email his details to us with his registration number. Also further information re fees and transfer information.

The information we have from Royal London (dated September 2015- so slightly out of date) is 14191.25 tax free cash plus £168.79 per month with no escalation and a 5 year guarantee period and no dependant pension. There are also a few other scenario's with 3% escalation and dependants pension at 50%.

I will contact them now for a GAR rate at 60.

Regards

woolly_wombat

REDSHOES wrote: »

He accessed a company called pensionreports.co.uk who appeared very professional and competent and advised him that this was doable and they would get an IFA to contact him

That's ringing alarm bells.

Who is this 'IFA'?

Linton

Introducers dont at the moment need to be registered. However the FCA seem to be looking into it - see here. There have been a series of cases where things have gone wrong.

The question I would ask is what is the intermediary actually contributing to solving your problem? Why do they need to be in the loop at all? Its much cleaner to engage an IFA yourself. Then it is clear that they are working for you and you have the clout to demand the answers in a reasonable timeframe.

REDSHOES

Hi Wombat.

Pensionreports are e-mailing details of the IFA through and proof that he/she is regulated so we can check this.

They say the reason it is taking so long is because the financial advisor IS regulated and that they have to check that the information they send to Royal London is correct and reccommended by themselves - apparently all due to the attached GAR. Pensionreports also say they can guarantee any other company dealing with our request will take at least as long.

We want to transfer so we can have access to this pension and not a monthly sum from an annuity. My husband still works and will probably continue to do so until he is 66. He has a private pension which he took at 55 and also a civil service pension to come. I have an NHS pension and we have both had state pension statements so we know what we will be getting from them.

We don't want to spend all the money in this pension. We just want the pension freedom to use/invest/access it