AVC transfer to Sipp - fa advice?

ermine

cloud_dog wrote: »

I have (just now) requested confirmation from the scheme administrators.

The outgoing scheme won't give a toss, provided it's possible. It's the receiving SIPP provider that may choose to stand on protocol. You can either try and find another receiving SIPP provider who doesn't lay such onerous requirements, advice is only legally mandatory for transfers for > £30,000 out of a DB pension, or try and find an IFA cheap enough. This cost me £500 for advice to front run my DB pension with my AVCs, it's the most expensive number I've ever bought, but worth it, although my AVC was a fair amount bigger than yours so the percentage cost was lower.


There is not a huge amount of validation of the FCA number that I could observe with HL, as long as it's a valid FCA number and matches the provider it'll probably do, nudge, wink

markinsouthsea

I really thought I was clued up with this, clearly not. Back to the drawing board then, as I guess employing a pensions specialist will not be cost effective.

Until the changes to pensions years ago I had resigned myself t the fact that I would be having to buy an annuity with this money albeit grouping with a stakeholder pension.

cloud_dog

dunstonh wrote: »

Firms are allowed to make commercial decisions that insist on advice where they feel a transaction may not be in your best interests.

There has been continuing pressure on SIPP providers in the last few years to take more responsibility for the things they do. A number of FOS decisions have gone against them for carrying out instructions given to them without question.

AVCs can be hard linked to the DB scheme. In some cases, they can be used to pay the TFC instead of the main scheme. So, these would be some of the concerns that the SIPP provider will have.

Dunstonh, as mentioned previously (and other threads), I am using my AVC to help provide some flexibility for my retirement planning. By this I mean that the entire pot will be transferred probably to a SIPP and be drawn down to fill the gap between retirement (leaving work) and the commencement of my DB scheme pension.

I have tried to find out if I will be required to obtain financial advice (pension transfer IFA).

My scheme allows me to use the AVC to purchase additional years benefit and also to counted as part of the 25% TFLS, should I wish to; which I do not. The scheme also states that I can transfer the AVC completely separately to the main DB pension.

Who can I contact to obtain confirmation that I will likely need to undertake a pension transfer IFA review, or I will not? OR, is it that the rules/regulations are sufficiently broad so that it would be at the discretion of the new SIPP provider? This would be an unsatisfactory situation for myself, ideally I would prefer some form of certainty.

dunstonh

My understanding is that an AVC with no safeguarded benefits would require limited transfer permissions. Not an adviser with the full Pension Transfer permissions (PTS) but at least a limited permission for PTS. You would expect most advisory firms to have that permission.

However, whether a platform deems it necessary is something I can't answer you. I suspect the only way you will get that answered is by contacting the platform and asking them if they accept AVCs with no safeguarded benefit transfers without advice.

cloud_dog

Thanks for the prompt response, and I appreciate that you don't actually have a crystal ball.

I'm using the AVC route for tax efficient purposes but am trying to gauge if the additional savings, i.e. SS, might be mitigated by the need to consult an IFA regarding the transfer, and therefore would I be as well off, or there or thereabouts by simply making my additional contributions in to a SIPP now.

If we were to assume I had an AVC pot of approx £120k, what would be the approximate transaction cost percentage for a review transfer (ignoring the pension specialist IFA option atm)? Or would there be a range for a fixed price review?

EDIT: Would I be better off ringing some SIPP providers and asking the hypothetical question? Again, accepting that the answers can only valid for this point in time.

marlot

campbell19925 wrote: »

Unless it is a free-standing AVC the AVC will be attached to the DB pension meaning you cant access the £15,000 unless you access/move the whole thing.

You'll need to take financial advice to do this as the value will be over £30,000 in total.

My AVC is linked to my deferred DB pension, and allows:


Option 1: Full DB pension with no PCLS. In which case, my full AVC fund can be used to purchase an annuity, transfer to another provider or take as a lump sum (75% taxable).


Option 2: Take a PCLS from the DB and a reduced DB pension. In which case, my full AVC fund can be used to purchase an annuity, transfer to another provider or take as a lump sum (75% taxable).


Option 3: Take the full DB pension, and fund a PLCS from the AVCs, based on the combined value of the AVCs and DB. With the residual AVC fund I can purchase an annuity, transfer to another provider or take as a lump sum (75% taxable).


Option 3 is by far the most advantageous. I was hoping to do it without advice, but the residual AVC will be over £30k.

cloud_dog

Ok, so...Capita have come back and stated:

We can confirm that, as the Scheme’s AVCs are Defined Contribution (DC) benefits, they would not be subject to the requirement to receive financial advice.

So that is positive, for me. Is it likely that receiving schemes may err on the side of caution and require a IFA review before accepting the transfer?

dunstonh

money purchase to money purchase with no safeguarded benefits should not raise an eyelid with the receiving scheme.