Pension transfer - fees advice please

ArmyDilllo

Hi,

I have two final-salary pensions.
I left both employers years ago and only contributed for a short period.
Both are for quite small amounts (one just over £2k per annum, one just under) and the subject of my question.

Background
I have a larger SIPP from two much larger funds, recently amalgamated to £175k.
The plan is to withdraw my personal income tax allowance from this using UFPLS (with 25% tax-free).
That means drawing £15,333.33 income (£11,500.00 tax allowance, + £3833.33 as my 25% tax-free) subject to income tax, albeit below my allowance.
I am fortunate enough to have significant amounts invested elsewhere in tax efficient vehicles (ISA's, investment bond, etc) which I can draw the rest of my income from without incurring income tax and they top up my income to a more reasonable level.

My state pension will kick-in in 2026, when I plan to forget about anything left in my personal pensions (other than the bridge the gap between the state pension and my personal tax allowance) and let them grow and be left to my beneficiaries.

Now, back to the final salary pensions.
I've been offered £50k to transfer both.
I am a succesful investor and believe I will benefit having this £100k in cash now, so I can grow it myself, rather than leaving it to get a couple of £2k payments per year from 2025 (my original retirement date before the Govt. robbed me of a year).

I'm happy to go ahead and arrange this, but the Govt. tells me that I can only do it legally by proving that I have taken financial advice, because the transfer value is over £30k.
That means I have to pay a fee (£1k?) to someone else for doing nothing and advice I may completely ignore, which I'm not very chuffed about.

Question 1:-
Is there a way around having to pay for this advice?

Question 2:-
As I have one pension from which I am making UFPLS withdrawals (not this year, yet), can I transfer these two smaller pensions into a separate Drawdown pension and withdraw the 20% tax-free amount immediately?
If I can, and I see no reason why I shouldn't, that would take up this year's ISA allowance.

Keep_pedalling

£50k for a guaranteed (presumably indexed linked) £4K PA does not sound like a good deal to me, and a good reason why compulsory advice exists.

p00hsticks

ArmyDilllo wrote: »

Hi,

Question 1:-
Is there a way around having to pay for this advice?

Answer 1:-

No, there isn't.

p00hsticks

Keep_pedalling wrote: »

£50k for a guaranteed (presumably indexed linked) £4K PA does not sound like a good deal to me, and a good reason why compulsory advice exists.

Although the OPs original reference is for '50k to transfer both' I think they must actually mean that the CETV is around £50k for EACH of the £2k per annum pensions (s/he mentions a total of £100k). If it were £50k total for the two then presumably the CETV for each would be under the £30k threshold that requires advice to be taken and s/he wouldn't be asking Question 1.

Keep_pedalling

p00hsticks wrote: »

Although the OPs original reference is for '50k to transfer both' I think they must actually mean that the CETV is around £50k for EACH of the £2k per annum pensions (s/he mentions a total of £100k). If it were £50k total for the two then presumably the CETV for each would be under the £30k threshold that requires advice to be taken and s/he wouldn't be asking Question 1.

True, and I should not really try to speed read long posts.

sandsy

Q1: no there isn't. The trustees of your final salary schemes are not allowed to release the funds until you can show documentary evidence that you have received advice (irrespective of what that advice says) from an FCA authorised adviser.

Number75

Over dramatic nonsense wording about the Government "robbing" you of a year.

See all the tax gains you've got in the DB and that SIPP and other vehicles like ISAs? All the government helping you to fund your retirement. That they have delayed by one year one element of pension funding which was never guaranteed in neither here nor there and certainly not "robbery".

ArmyDilllo

Thanks guys.
Yes, that should be £50k for each fund.

I should also mention that I projected the early lump-sum and the guaranteed income to my 90th birthday and that also seems to indicate that taking the lump sum now would benefit me (and/or my heirs).

I have some health concerns which, although not life-threatening, do lend themselves to an assumption that I will not last until 90 either.

These things in mind I can't find a reason not to approach this exercise positively.
I just wish I didn't have to fork out money to someone for a decision I've already made.

I'm budgeting for a flat fee of £1,500 with a further £1,000 as 1% percent of the total amount I will have to get advice to move.
If I can't avoid having to pay someone just to rubber-stamp the decision, is there a way I might be able to mitigate some of the cost more efficiently?

Thanks for your thoughts and contributions.

ArmyDilllo

Number75 wrote: »

Over dramatic nonsense wording about the Government "robbing" you of a year.
See all the tax gains you've got in the DB and that SIPP and other vehicles like ISAs? All the government helping you to fund your retirement. That they have delayed by one year one element of pension funding which was never guaranteed in neither here nor there and certainly not "robbery".

Thanks but all those tax gains you refer to came from sacrificing money to plan for my future, not from the Government.
Tax is not refunded on my SIPP, merely postponed until it has grown and they can take more of it.
Tax has been paid on money I contributed to bonds and ISA's - their profit/loss is tax-free (for now).

I started work with a reasonable expectation of 65 as my retirement age for state pension purposes based upon government projections and independent financial advice I received at the time.
I have accumulated all the N.I. contribution years necessary to receive a full state pension.
After I had achieved that, the Govt. was forced to move the goalposts because of it's own mistakes.
Not mine.

I got off light; Had I been born two months later I'd be looking at waiting two more years to receive a state pension.
Our kids won't see it until they're 70.
By that age they're going to need an NHS service to provide them with a reasonable level of comfort in their retirement but there won't be any money left for that either.


Successive Govt's have chosen to reduce taxes in order to buy votes.
Reducing taxes means less money in the Exchequer's coffers to provide for the future of all sorts of services.
If my pension hadn't been used to win elections, I could still see my state pension when I'm 65.

Nobody's being held to account and the practice continues.

The Govt. reduced the state pension I paid into all my working life by one year.
If you see that as good thing in your circumstances, I congratulate you.
I have been robbed and that's not over-dramatic.


I notice you've had no meaningful contribution to this thread other than to try and troll it.

jamesmorgan

You also need to be careful that your SIPP provider will accept the transfer. Many providers will only accept transfers where the advice given was positive. If you are not careful you could pay for advice and then find that it is still not possible to transfer to your SIPP

http://www.telegraph.co.uk/pensions-retirement/financial-planning/i-was-forced-to-waste-1k-on-advice-when-all-i-wanted-was-to-move1/

PeacefulWaters

ArmyDilllo wrote: »

Thanks but all those tax gains you refer to came from sacrificing money to plan for my future, not from the Government.
Tax is not refunded on my SIPP, merely postponed until it has grown and they can take more of it.
Tax has been paid on money I contributed to bonds and ISA's - their profit/loss is tax-free (for now).

I started work with a reasonable expectation of 65 as my retirement age for state pension purposes based upon government projections and independent financial advice I received at the time.
I have accumulated all the N.I. contribution years necessary to receive a full state pension.
After I had achieved that, the Govt. was forced to move the goalposts because of it's own mistakes.
Not mine.

I got off light; Had I been born two months later I'd be looking at waiting two more years to receive a state pension.
Our kids won't see it until they're 70.
By that age they're going to need an NHS service to provide them with a reasonable level of comfort in their retirement but there won't be any money left for that either.


Successive Govt's have chosen to reduce taxes in order to buy votes.
Reducing taxes means less money in the Exchequer's coffers to provide for the future of all sorts of services.
If my pension hadn't been used to win elections, I could still see my state pension when I'm 65.

Nobody's being held to account and the practice continues.

The Govt. reduced the state pension I paid into all my working life by one year.
If you see that as good thing in your circumstances, I congratulate you.
I have been robbed and that's not over-dramatic.


I notice you've had no meaningful contribution to this thread other than to try and troll it.

While sympathetic, medical advances supported by the NHS have probably bought you an extra decade or so of life.