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Two Private Pensions ?

If this sounds confused it is because I am.

My husband has 2 pensions with a well known company. Apparently one was frozen during a period there was no spare money and then another started when it was affordable. Same company. I think the FA has been a bit naughty with this (before my time) but that is bye the bye. :confused:

As we are now approaching 50 at a rate of noughts I suggested restarting the frozen plan and paying into both but my husband thinks you cant have 2 private pensions at once. Is this right? i'm not going near the FA to ask and don't know who else to ask?
:hello: Don't believe all you hear, spend all you have or sleep all you want:hello:

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  • dunstonh
    dunstonh Posts: 118,616 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    My husband has 2 pensions with a well known company. Apparently one was frozen during a period there was no spare money and then another started when it was affordable. Same company. I think the FA has been a bit naughty with this (before my time) but that is bye the bye. :confused:

    Why would having to seperate plans with the same company be naughty?

    Maybe the first one was a retirement annuity contract which cannot be incremented or restarted over 1988. Or maybe the provider came out with different revision and it wasnt possible or wasnt best advice to restart the old one (very common). Maybe the second one had lower charges as it was mono charged based on stakeholder rules and the original one was a multi-charged legacy pension.
    As we are now approaching 50 at a rate of noughts I suggested restarting the frozen plan

    What is your reason for wanting to restart the frozen plan?
    my husband thinks you cant have 2 private pensions at once. Is this right?

    You can have as many as you like providing the total of all of them combined doesnt exceed the lifetime allowance on value. Currently 1.6 million pounds.

    i'm not going near the FA to ask and don't know who else to ask?

    You may be doing the adviser in question a dis-service by saying they have been naughty. There are plenty of reasons to not restart an old plan but a new one. I think you need to research why the old plan wasnt restarted and why it wasnt transferred into the new plan (there are plenty of reasons why that may not have happened as well).

    Most IFAs will aim to transfer old plans into newer ones when justified. However, most tied FAs dont have the authorisation to do that so will leave old ones where they are and will issue the current version.
    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.
  • Scoflo
    Scoflo Posts: 329 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    I will investigate this further and try and comeback with some answers. thank you for taking the time to follow this up.
    :hello: Don't believe all you hear, spend all you have or sleep all you want:hello:

  • Scoflo
    Scoflo Posts: 329 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Ok - the answrs.

    The feeling that 2 pension plans was a bit naughty was because comission was gained on both of them. That is my interpretation and I am prepared to be absolutely wrong. A "pension holiday" was taken because my husband was paying into a work pension. When that employment ended my husband tried to restart the original and was told not to bother. A better type of pension was available.

    I thought it would be better to restart a frozen plan than restart a new one when the comission has already been paid on the first and therefore the plan will build on investments.

    The IFA was tied but to the company both plans are with. I am afraid I can't tell the difference between one plan and the other. They are both called personal pension plans.

    Digging about I have also found a joint mortgage endowment with the same company. Gawd knows what the score is with that.
    The IFA has an allegiance to my husbands ex-wife and previous dealing my husbands speaks of makes me feel uneasy.
    :hello: Don't believe all you hear, spend all you have or sleep all you want:hello:

  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    Which well known company are we talking about?

    In particular if these pensions and endowments are invested in With profits funds, the name of the company should give a good pointer about how good or bad the investments might be.
    Trying to keep it simple...;)
  • dunstonh
    dunstonh Posts: 118,616 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    The feeling that 2 pension plans was a bit naughty was because comission was gained on both of them.

    Not necessarily. When the payment was stopped, renewals would have ceased and there could have been a clawback as well. When started again, the commission would reflect the increment back. It doesnt matter if it was a new scheme or an old one. Tied agents not being paid renewals could potentially benefit by starting a second one though.
    When that employment ended my husband tried to restart the original and was told not to bother. A better type of pension was available.

    Who was the provider? You can look at a lot of providers that come out with different versions. Some providers even call their products by the version number. i.e. Pearl have a V1, V2, V3 and V4. You could put the V1 into a pension holiday but if you wanted to restart the V1 you would have found the V2 was the better option and starting the V2 was cheaper than restarting the V1. If you had a pre 1989 pension called a retirement annuity contract or section 226 you couldnt top these up or restart a paid up one after 1988 (unless there were certain contract events).
    I thought it would be better to restart a frozen plan than restart a new one when the comission has already been paid on the first and therefore the plan will build on investments.

    No. Say you had a version 1 of xyz provider and that had a 5% bid/offer spread and that was in payment holiday but version 2 had been launched with no bid/offer spread and version 1 was closed for new business. Version 2 is better than version 1.
    The IFA was tied but to the company both plans are with.

    They are not an IFA. IFAs cannot be tied to one company. The adviser here is a tied representative. Its a common error to mix up IFAs and tied reps that means we get the brunt of the bad press despite having the lowest complaint stats of any advice distribution channel. Tied reps have the worst reputation.
    I am afraid I can't tell the difference between one plan and the other. They are both called personal pension plans.

    WHo is the pension provider?
    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.
  • Scoflo
    Scoflo Posts: 329 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    The pension povider is Standard Life.

    1 plan seemed to start 1999 and is called Pension managed one Fund. It is index linked

    1 plan seemed to start 1993 and is also called pension managed one fund. What I am reading is dated 2004 cos my husband has taken 2007 to work (and I dont know where the others are misfiled). It shows a really small payment being made because he opted out of the additional state pension scheme. I think he has opted to opt back in shortly after this from what I recall.

    I didnt think he was an IFA cos he was tied in but my OH called him that last night so I went along with it.
    :hello: Don't believe all you hear, spend all you have or sleep all you want:hello:

  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    IIRC Standard Life has never had tied salesmen so he may well have been an IFA. In around 2000 IIRC Standard put all its unit linked pensions on stakeholder charges of 1% , so if that were the case there would be no problem starting to pay into the pension again, thoug it would be advisable to choose a group of funds not just one.SL has some good external choices available.

    It seems as though you have one fund for ordinary pension conts and one for contracted out protected rights money - not sure why you needed a new pension for the latter, as one will usually do.Ring up SL and check the charges and the fund choice.

    You should also check the endowment.Post some figures on it:

    Guaranteed sum assured
    Declared bonuses
    Surrender value
    Monthly premium
    Maturity date
    Maturity forecasts

    Interest rate you pay on your mortgage.
    Trying to keep it simple...;)
  • dunstonh
    dunstonh Posts: 118,616 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    IIRC Standard Life has never had tied salesmen so he may well have been an IFA.

    Std Life did have a tied salesforce. A small one and some linked to building societies.
    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.
  • dunstonh wrote: »

    You can have as many as you like providing the total of all of them combined doesnt exceed the lifetime allowance on value. Currently 1.6 million pounds.

    That's not completely correct.

    You may have as many private pensions as you wish. Contributions on all combined cannot exceed £3600 PA if you have no UK relevant earnings or 100% of your UK relevant earnings if you ARE earning.

    The values of each (so the combined fund sizes) can exceed the lifetime allowance (LTA) which is currently £1.6 million but increases every tax year. However when you come to claim your pensions and purchase an annuity you will be hit by a tax charge if your fund exceeds the LTA at that time.

    On the off chance you are lucky enough to have pension funds above the LTA you can apply for certain types of protection directly with the HMRC
    I'm 23, I work for a well known financial company and although I have taken my financial exams and am qualified to become a financial advisor I am not a financial advisor yet.

    I am also a human and I do make errors. Please seek financial advice and do not take my posts as a rule of thumb!

  • 1 plan seemed to start 1993 and is also called pension managed one fund. What I am reading is dated 2004 cos my husband has taken 2007 to work (and I dont know where the others are misfiled). It shows a really small payment being made because he opted out of the additional state pension scheme. I think he has opted to opt back in shortly after this from what I recall.

    Once a pension contract has been set up to recieve on type of contribution it cannot be changed. I.E if a plan was origionally set up to recieve contracted out payments (protected rights) only then he could have never have made his own payments on to the plan also. The same goes if it set up for personal contributions (non protected rights) only.

    It sounds like he had one plan set up origionally which was only set to recieve the protected rights (there are advantages for this such as lower charges and also pre Aday having a combined plan meant having two sets of complex rules attached to one plan). When he then decided to make his own payments a second plan was then needed to be set up.

    I work for a well known pensions provider and this is not uncommon to see happen. We also would not class this type of seeling as any kind of mis-selling unless the financial advisor was told when the origional plan was set up that your husband may wish to make his own payments in the future.

    Anyway to answer what you raised in your origional post if these plans were set up as I expect he would not be able to make his own payments into the earlier pension at all.
    I'm 23, I work for a well known financial company and although I have taken my financial exams and am qualified to become a financial advisor I am not a financial advisor yet.

    I am also a human and I do make errors. Please seek financial advice and do not take my posts as a rule of thumb!
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