Pension Robbery. You can't Have Your Money

Saxonomous

That is my point, I don't really care what others think of my plan, it's mine and I want to implement it. You missed the point, but thanks for the comment

Saxonomous

For Clarity, this pension is a hybrid of DB and Final Salary.

I did consult another IFA... and got the same response.

JoeCrystal

Saxonomous wrote: »

For Clarity, this pension is a hybrid of DB and Final Salary.

I did consult another IFA... and got the same response.

You mean a hybrid of DC and DB/Final Salary? Final Salary IS DB.

dunstonh

But unless the figures are wrong, there are 2 choices:

1) Take the 1.3K pension, live to say 100 and get £52K out (less tax as it will be taxed as income)

2) pay the IFA'a fee to recommend a transfer to a drawdown SIPP and get a total of £90K out less the IFA fee and less tax on what you draw beyond the 25%.

Option 2 seems a no brainer that any IFA would recommend.

I MUST be missing something here, please explain why option 2 is so bad?

There are more than two options and the OP wants to do completely different by transferring and then doing 100% UFPLS. Paying significant tax on the bulk of it (possibly 40-60% - if things like lost personal allowance come into play). He then wants to take the remainder and buy a property so he can pass it on to beneficiaries. So, it will be subject to IHT to at 40%. He seems to think that the pension is not passed on. He is also using an income rate which would not be correct if transferred and doesnt sound correct to be begin with (possibly a figure that has not been updated to reflect the annual increases).

The property would have to make unrealistic gains over the pension for it to catch up with the tax paid. Let alone beat it on returns. And the justification for all that being that he wants to pass it on and doesnt think the pension does that.

You mean a hybrid of DC and DB/Final Salary? Final Salary IS DB.

There are DC schemes with a final salary underpin. Hybrid is a good way to consider those.

Dox

dunstonh wrote: »

There are more than two options and the OP wants to do completely different by transferring and then doing 100% UFPLS. Paying significant tax on the bulk of it (possibly 40-60% - if things like lost personal allowance come into play). He then wants to take the remainder and buy a property so he can pass it on to beneficiaries. So, it will be subject to IHT to at 40%. He seems to think that the pension is not passed on. He is also using an income rate which would not be correct if transferred and doesnt sound correct to be begin with (possibly a figure that has not been updated to reflect the annual increases).

The property would have to make unrealistic gains over the pension for it to catch up with the tax paid. Let alone beat it on returns. And the justification for all that being that he wants to pass it on and doesnt think the pension does that.

It's his decision.

msallen

Saxonomous wrote: »

That is my point, I don't really care what others think of my plan, it's mine and I want to implement it. You missed the point, but thanks for the comment

In that case, let me thank you profusely and ask if have a few thousand friends you can convince to do similar. We'll soon have austerity cracked.

Aegis

Dox wrote: »

It's his decision.

But it's an adviser's potential future liability, so finding someone willing to implement this plan will be very tricky indeed.

Prism

Saxonomous wrote: »

That is my point, I don't really care what others think of my plan, it's mine and I want to implement it. You missed the point, but thanks for the comment

The point is that you have a plan for some money that is not yours. Turn the money into yours first and then implement your plan.

dunstonh

Dox wrote: »

It's his decision.

And it is the adviser's decision not to accept the liability of future complaint that the OP make blaming the IFA for letting him do such a fool hardy thing.

There is a conflict. The regulator & ombudsman both say that insistent clients are allowed as long as the process if followed. However, they both say that an adviser should not transact something that they know to be wrong.

Dox

dunstonh wrote: »

And it is the adviser's decision not to accept the liability of future complaint that the OP make blaming the IFA for letting him do such a fool hardy thing.

There is a conflict. The regulator & ombudsman both say that insistent clients are allowed as long as the process if followed. However, they both say that an adviser should not transact something that they know to be wrong.

Not suggesting that the IFA should implement it - just confirm OP has received advice and can transfer out to whatever receiving scheme OP can find to accept the transfer, then go ahead with whatever they want to do.