Lifting a pension early but not retiring

Bethtw

So this is for my dad.

He has worked in the same factory since he was 16 and just turned 56. We've been having a few money problems so he decided to look into lifting his pension a bit early but he doesn't want to retire just yet.

He has a policy with Friends Life and within that policy there are 3 plans. He was told that he could lift a DD plan as it has finished building since he turned 55. So he started looking into it in February. He has called again and again and has been sent wrong information twice and it's just feels like they are messing us about.

Last week he sent back the form for the DD plan, nothing else just that one plan. Since he's spent so long trying to sort this out Friends Life said that they would fast track it and he would get it by the following week. That was two weeks ago so he phoned them again. This time they said they would put it on priority and my dad should have had it by Tuesday or Wednesday because it was late in the day when it was put on. Wednesday came and there was still no sign so again he phone, again they told him they would put it on priority and he should have had it today but again there was nothing there. So he phoned them and they are now saying that he has to take all 3 plans out even though the other 2 are still building.

He spent over an hour on the phone and hasn't got it sorted, they are meant to call back tomorrow to tell us what is happening. He phoned a colleague who also took his DD plan from Friends Life and he said that he got it without any hassle and the other two are still with Friends Life.

I was just wondering if anyone else has had a similar problem and how it was handled?

He is also being over taxed because he is in an emergency tax code but we found out that he can claim some of that back, but that's only on the DD plan. Not all three, the tax on all three is insane and he doesn't want to take it because he would be loosing around £30,000.

Any help would be great, it's really annoyed him and if it's not sorted out soon he could actually lose more money because he had invested in a few things based on the Friends Life saying that he would have it in his bank 2 weeks ago.

xylophone

What is a DD plan?

Does your father's employer provide a pension scheme?

Does he contribute to it?

The FL arrangement - can you give additional information?

Bethtw

Yeah he has been paying into the pension plan for years, since he started I think. DD is the plan number there's 3 plans numbers a DD, DK and BC. All workers in the factory that have been working there a while have the same and some have been able to lift the DD plan but leave the other two but they're telling my dad that he has to lift all 3 of them. He doesn't want to lift all 3 because it means he will be out so much money, plus even more when he actually retires. It seems like Friends Life are messing him about but we can't think of why he's having all this trouble when others, in the same factory, with the same policy have taken it with ease. Especially since they said that he would only b getting the DD plan on Monday and now they're saying he has to take all 3.

atush

First of all:

"We've been having a few money problems so he decided to look into lifting his pension a bit early "


who is We? who needs your fathers money? If he is still working, I think it isnt him.

FP isnt messing him about, they are following rules. which can help pensioners being stripped of their life savings by others.

He does have other options, which we will tell him when he comes here to ask.

xylophone

I can't make any sense of this but another poster, dunstonh, might at least be able to throw some light.

http://forums.moneysavingexpert.com/member.php?u=29254

You could try a PM.

Otherwise, your father might seek an appointment with Pension Wise for some guidance

https://www.pensionwise.gov.uk/

or he could ring TPAS

http://www.pensionsadvisoryservice.org.uk/

or get some advice from an IFA - ring round for fees.

http://www.thepfs.org/yourmoney/find-an-adviser/

Bethtw

We as in our family, his job changed and it was a big pay cut and if you really want to know my mum had some health issues and couldn't work and didn't work enough hours to get sick pay so dad had to support us a bit more so his bank balance fell.

It feels like they are messing him about. One minute he can take just one plan then the next he has to take all 3, why not tell dad this in February when he started looking into it? Why leave it until the last minute to tell him that he has to take all 3 plans when there are people in the factory that have taken just one plan while leaving the other two still active?

He went to Pension Wise already to ask about the tax rate because he was getting taxed in an emergency code which he didn't understand why. They told him that they were in fact taxing him more than they should be but he could claim some of that back.

We just don't see why my dad has been told he has to take all 3 of his plans under his policy when no one else has been told that. Did Friends Life make a mistake with my dad policy or with everyone else in the factory who has cashed part of their policy in?

xylophone

Can you clarify why there are three plans and what the connection between them is?

Bethtw

Turns out th person he was talking to yesterday hadn't a clue what he was talking about and gave my dad the wrong information. A nice woman called Bella rang back today and told him that they were very sorry for the mix up and that he would have the DD plan in his account by Monday while the other two will stay and continue building with Friends Life.

I suggest Friends Life hire better staff and sort out their system, as someone who has studied System Analysts I could think of far better ways to run this circus that they call a business. It is unfair messingpeople around like that. It's people's life savings they're dealing with, not some pocket change.

bigadaj

Bethtw wrote: »

Turns out th person he was talking to yesterday hadn't a clue what he was talking about and gave my dad the wrong information. A nice woman called Bella rang back today and told him that they were very sorry for the mix up and that he would have the DD plan in his account by Monday while the other two will stay and continue building with Friends Life.

I suggest Friends Life hire better staff and sort out their system, as someone who has studied System Analysts I could think of far better ways to run this circus that they call a business. It is unfair messingpeople around like that. It's people's life savings they're dealing with, not some pocket change.

Sounds as though things are progressing.

Is your father aware if the tax implications of taking this pension. What are his other incomes and what investments is he looking to put the money into. It's iften the case that taking out of a pension environment exposes income to tax, it may be that this has been covered and though about but the question needs it be asked.

Goldiegirl

Bethtw wrote: »

it's really annoyed him and if it's not sorted out soon he could actually lose more money because he had invested in a few things based on the Friends Life saying that he would have it in his bank 2 weeks ago.

I'm a bit confused you said the family had money problems, yet he's been investing in things?


What sort of things has he invested in - this info may affect the suggestions that people make

xylophone

http://www.pruadviser.co.uk/content/knowledge/technical-centre/taxation_on_pension_income/

re taxation of pension in excess of 25% PCLS anything over and above the PCLS will be taxed as income.

he may well be over taxed.


He can either claim an in year refund or wait for HMRC to calculate any repayment due after the beginning of tax year 17-18.

See also https://www.gov.uk/tax-on-your-private-pension/annual-allowance