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IFA advice before accessing pension

Being very aware of the cons, is it a rule / law you have to take IFA advice before accessing or changing your pension?
I don't have that many pensions, I have 2 deferred employer pensions plus a deferred SIPPS plus the current "live" GPPP pension I'm paying into.
When I'm 4 or 5 years away from retirement so being a good MSE follower (where planning is all) I started looking at ways to put these pensions together I was shocked to be told that my GPPP provider couldn't accept any pay-ins until I'd received IFA advice, then found out to do this with all pensions could cost me over £10k why? Does any MSE members have experience or advice please?

Comments

  • zagfles
    zagfles Posts: 21,548 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    Generally the law states that you only need advice if you want to transfer a defined benefits pension or one with guarantees (guaranteed annuity rate etc).

    But some providers will insist on advice for anything you do with them - even increasing your contributions! They prefer to transact through intermediaries. However they cannot stop you transferring away from them, or insist you have advice for this, provided as above it's not a DB scheme or one with guarantees.
  • xylophone
    xylophone Posts: 45,749 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I don't have that many pensions, I have 2 deferred employer pensions plus a deferred SIPPS plus the current "live" GPPP pension I'm paying into.

    How can a SIPP be "deferred"? Do you simply mean that it is a pension plan to which you no longer contribute? Or do you mean that as you are under 55 you cannot yet access it?

    The two occupational schemes to which you refer - were they Defined Benefit/Final Salary Pensions or did they have any other sort of safeguarded benefit?

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf
  • dunstonh
    dunstonh Posts: 120,201 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Being very aware of the cons, is it a rule / law you have to take IFA advice before accessing or changing your pension?

    Only if there are safeguarded benefits worth over £30,000.
    I don't have that many pensions, I have 2 deferred employer pensions plus a deferred SIPPS plus the current "live" GPPP pension I'm paying into.

    Deferred employer pensions would suggest defined benefit schemes. You may be required to seek advice if you wish to move those.

    Deferred SIPPs tend to be a half way house that offer poor value and are largely out-of-date nowadays. Are you sure you meant to use the word deferred?
    I was shocked to be told that my GPPP provider couldn't accept any pay-ins until I'd received IFA advice, then found out to do this with all pensions could cost me over £10k why?

    Liability is the reason why. A provider that retails via an adviser/intermediary may take simple transactions but a transfer in from a defined benefit scheme is nearly always going to result in you needing advice. The provider doesnt want to accept liability for the transaction (which is reportable to the FCA and statistically, is classed as a mis-sale in around 4 out of 5 cases).

    A £10k is high, even for a defined benefit scheme transfer. You usually see figures around £5k (although some may do it cheaper). Possibly, as there are two schemes, it is £5k each. The most common excess on defined benefit transfers for an adviser's PI insurance is £5k.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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