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Cashing in a section 226 pension nightmere

topfmine
Posts: 11 Forumite
I took out a section 226 pension years ago when i was self employed and in the struggles of self employment i paid in for a while and forgot all about it. Over the years it grew to a small some around 8k with a annual statement sent to me by post to inform me of its update, so now being 55 i thought i will cash that in, but not so easily as thought. It seems that a 226 pension has to be transferred to another pension to be cashed in, to date so i have been told a flexi access pension draw down. Aviva (not the best of companies to deal with) took over the original company a while back who i took out the policy with. I phoned them and they told me that i had to transfer the pension over into a transferable policy and they sent out the transfer forms but said i had to get a financial advisor to find a pension to transfer into. I asked them what policies they had and they insisted that i had to seek a FA. With the transfer forms i got from Aviva they sent me information of what i could get with my Guaranteed Annuity rate which i am not interested in, all based on IF or COULD, as i already have a local authority pension and just want the cash and run. I have been told that Avia are trying to cover their rear part as a policy of not being sued for mis selling.
I went to pension wise run by the government who explained the implications of being taxed and feeS that a FA will charge which i know i will have to pay plus be robbed by Aviva for transferring the policy to another and most probably add a fee to take the money out etc, very helpful and informative but still had to seek advice from a FA. I did speak to a independant FA without being charged and he said that i should ask Aviva if i can take my money out under the small pot rule. which seems a more easier step, not sure if this is a easy step, anyone tried this. It would have been easier to invest in gold and hide it under the bed that to go through the bureaucracy of pension investments. Has anyone had the same problem and how did you get your money out dealing with a 226 policy:mad:.
I went to pension wise run by the government who explained the implications of being taxed and feeS that a FA will charge which i know i will have to pay plus be robbed by Aviva for transferring the policy to another and most probably add a fee to take the money out etc, very helpful and informative but still had to seek advice from a FA. I did speak to a independant FA without being charged and he said that i should ask Aviva if i can take my money out under the small pot rule. which seems a more easier step, not sure if this is a easy step, anyone tried this. It would have been easier to invest in gold and hide it under the bed that to go through the bureaucracy of pension investments. Has anyone had the same problem and how did you get your money out dealing with a 226 policy:mad:.
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It seems that a 226 pension has to be transferred to another pension to be cashed in
Depends on what type of S226 pension it is. Most do not need to be transferred if you wish to use the small pots option. However, if you wanted a drawdown option then they would need to be transferred.Aviva (not the best of companies to deal with) took over the original company a while back who i took out the policy with.
Aviva support small pots on legacy pensions. So, there should be no reason to transfer it.I asked them what policies they had and they insisted that i had to seek a FA.With the transfer forms i got from Aviva they sent me information of what i could get with my Guaranteed Annuity rate which i am not interested in,
Why are you not interested? Many GARs are in double digits and have a n early breakeven point.I have been told that Avia are trying to cover their rear part as a policy of not being sued for mis selling.
Whoever told you that is talking out of their backside.I went to pension wise run by the government who explained the implications of being taxed and feeS that a FA will charge which i know i will have to pay plus be robbed by Aviva for transferring the policy to another and most probably add a fee to take the money out etc,very helpful and informative but still had to seek advice from a FA.It would have been easier to invest in gold and hide it under the bed that to go through the bureaucracy of pension investments.
No it woudlnt.Has anyone had the same problem and how did you get your money out dealing with a 226 policy.
I think the best thing at this stage is stop listening to foolish comments from other people who do not know what they are talking about and stick to factual information. They are giving you silly views which are not accurate and clouding your judgement and ability to act sensibly.
Perhaps read the retirement options pack Aviva send out which details the various options. And then select the small pots option.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.0 -
did speak to a independant FA without being charged and he said that i should ask Aviva if i can take my money out under the small pot rule.Perhaps read the retirement options pack Aviva send out which details the various options. And then select the small pots option.
OP, have you received a retirement pack offering the small pots option?0 -
Thanks for your information and help, much appreciated, Didn't know that there were different type of 226 pensions. Didn't receive any pack relating to a small pot option. Trying to ring them about it.0
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Thanks for your information and help, much appreciated, Didn't know that there were different type of 226 pensions. Didn't receive any pack relating to a small pot option. Trying to ring them about it.
If you are taking your pension close to the scheme retirement age, Aviva start a process many many months before its due giving you information about the options and a form asking you for any options you are interested in (to start the filtering basically).
They then follow that up with a quote and form to carry out that option.
If you are not near the scheme retirement age, you have to ask for these manually as the automatic trigger wouldnt have been hit yet.
So, just ask them for a small pots cash in form. I did one last week and got it emailed to me later that day. Although when an adviser is involved, it is usually quicker as we take on liability. Aviva may want a telephone call to make you aware of the risks and consequences.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.0 -
Just spoke to Aviva and they said that i can't take out my pension under the small pot rule until i am 60 as its in the contract which is a government rule and said i cant do anything about it.0
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Just spoke to Aviva and they said that i can't take out my pension under the small pot rule until i am 60 as its in the contract which is a government rule and said i cant do anything about it.
https://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum
Rules on taking a small pension as a cash lump sum at above link.
Scroll down to the bullet points on minimum age. Then go back to Aviva and tell them it was age 60 until 6th April 2015 but age 55 after that and the person is mistaken.
Prior to 2006, Section 226s used to have a minimum retirement age of 60. But the Govt abolished those in 2006 and aligned them with personal pensions. So, if Aviva are saying they cant do it, then it is their choice and not the Govt who they are blaming.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.0 -
Just spoke to Aviva and they said that i can't take out my pension under the small pot rule until i am 60 as its in the contract which is a government rule and said i cant do anything about it.
I don't know anything about section 226 pensions, so feel free to ignore me if I've got this wrong !
Does the policy have a GMP, and is OP female?
If so, then the scheme rules may preclude the taking of a trivial commutation small pot before GMP age (as is the case in the LGPS).0 -
I will ring them again and state what you said. I did see this mentioned before that Aviva was playing hard to get with age on another forum i saw a couple on months ago. Not sure if they are still persistent i should let them know i will be contacting the Pensions Ombudsman or something?0
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I don't know anything about section 226 pensions,
https://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/contract-based-schemes/retirement-annuity-contracts
No GMP but might have GAR.0
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