Mandatory Financial Advise

hyubh

colnotlob wrote: »

The figure is based on the letter she received after she finished working for the council in June this year.

I would be very surprised if an LGPS administrator is putting estimated CETV figures on statements of deferred benefits. More likely you've misinterpreted the notional value for LTA purposes, as Silvertabby suggests - I'd double check.

hyubh

colnotlob wrote: »

She doesn't need advice she knows what she wants to do, retire at 61 and use the SIPP as draw-down to live off between 61 and 65 when I will start to receive my 2nd DB pension.

Why not just draw the LGPS pension early...?

mgdavid

colnotlob wrote: »

The figure is based on the letter she received after she finished working for the council in June this year.

that reads as a very coy reply!
What is the actual wording relating to that figure in the letter? Or when you say 'based on' do you mean you've calculated it yourself in some way from information provided?

FatherAbraham

hyubh wrote: »

Why not just draw the LGPS pension early...?

They want to deplete the LGPS to exploit unused tax allowance, and fill an income cap until the OP receives an expected pension - see post #6.

Taking LGPS bennies early is presumably expected to produce too little income immediately.

mum_of_joey

I find that this £30,000 'cut-off' for mandatory financial advice to be very strange. My pension pot was about £300 UNDER £30,000 earlier this year and I got pension advice from PensionWise. By the time I had got my appointment with him, made my choice and things got going administratively with my pension company, it teetered about £150-£200 under £30,000. Now, if it had gone over £30,000, even by £1, by the time that the pension company started dealing with my pension, would I have then been obliged to call in a paid FA? (I had earlier rung round some, anyway, but they were charging 5% (about £1500) and the PensionWise chap, although couldn't give me actual recommendations, did make it all much clearer and he was free!)

Would 'commonsense' have prevailed, and I be allowed to carry on without an FA or would that £1 over have cost me £1500 in fees? With 'colnotlob' wife's pension, is there not a 'middle ground' where someone who knows what they intend to do, and the amount is 'relatively' small, be allowed to take it on themselves to do it? Is the whole thing devised to cover the backs of the pension company or the client? I know that a 'line' has to be drawn somewhere, but is £30,100, say, a more 'terrible' risk than £29,900?

dunstonh

I find that this £30,000 'cut-off' for mandatory financial advice to be very strange.

Any line in the sand is going to find someone £1 under that line

(I had earlier rung round some, anyway, but they were charging 5% (about £1500)

That is very cheap for a DB transfer. I wouldnt go near one for £1500.

Would 'commonsense' have prevailed, and I be allowed to carry on without an FA or would that £1 over have cost me £1500 in fees?

It would not be accepted by the receiving scheme if it was 1p over £30,000.

Linton

mum_of_joey wrote: »

I find that this £30,000 'cut-off' for mandatory financial advice to be very strange. My pension pot was about £300 UNDER £30,000 earlier this year and I got pension advice from PensionWise. By the time I had got my appointment with him, made my choice and things got going administratively with my pension company, it teetered about £150-£200 under £30,000. Now, if it had gone over £30,000, even by £1, by the time that the pension company started dealing with my pension, would I have then been obliged to call in a paid FA? (I had earlier rung round some, anyway, but they were charging 5% (about £1500) and the PensionWise chap, although couldn't give me actual recommendations, did make it all much clearer and he was free!)

Would 'commonsense' have prevailed, and I be allowed to carry on without an FA or would that £1 over have cost me £1500 in fees? With 'colnotlob' wife's pension, is there not a 'middle ground' where someone who knows what they intend to do, and the amount is 'relatively' small, be allowed to take it on themselves to do it? Is the whole thing devised to cover the backs of the pension company or the client? I know that a 'line' has to be drawn somewhere, but is £30,100, say, a more 'terrible' risk than £29,900?

Simple answer - It is the law so you could ask your MP.


As you say the line has to be drawn somewhere. So if £30100 is nearly £30000, then £30200 is nearly £30100 etc etc. At some point the answer must be "this far and no further". That point becomes the new £30K.

xylophone

My pension pot was about £300 UNDER £30,000 earlier this year and I got pension advice from PensionWise.

Your pension pot (assuming this one) was a DC pension with no safeguarded benefits so that regardless of its value, you were not required to take financial advice.

https://forums.moneysavingexpert.com/discussion/comment/74502795#Comment_74502795

In the Pensions forum I have been discussing a 'surprise' pension that has come my way. Briefly, I opted out of SERPS in the 1980s but to be honest, had no idea what it meant, other than I may have thought that my old age pension would be less when I retired.

Advice is mandatory for the transfer out of a pension with safeguarded benefits where the value of the benefits is greater than £30,000.

https://www.reassure.co.uk/pensions/safeguarded-benefits/

mum_of_joey

xylophone. Yes, that is the pension pot that I was referring to, but what you have said is a surprise to me. When I phoned the two Financial Advisors, I explained exactly what this pension was, and how it came about, and neither of them said that for this sort of pension that they weren't mandatory. (I suppose they wouldn't!) Perhaps DunstonH had something there when he said that £1500 was 'very cheap' and he wouldn't touch someone who charged that - I may have had a lucky escape.

I know that the line has to be drawn somewhere regarding the £30,000 limit, but I do feel for the chap and his wife, if they're only a few hundred pounds over, which will now cost them - well - MORE than the £1500 that I was quoted, if they use a 'proper' advisor, if £1500 is considered cheap and 'suspicious'.

Pity there's not a 'scale' of charges,rather than a percentage, starting FROM the £30,000 threshold, though I guess they might say that it takes as much work to sort out a pension worth £30,000 as it does to sort out one worth £100,000! I am probably being very naive here, I admit. But 10% (say, to use a convenient figure) on £30,000, leaves £27,000 and 10% on £100,000 leaves £90,000. I would be a lot happier to pay the latter, even if it's more!

hyubh

mum_of_joey wrote: »

I know that the line has to be drawn somewhere regarding the £30,000 limit, but I do feel for the chap and his wife, if they're only a few hundred pounds over, which will now cost them - well - MORE than the £1500 that I was quoted, if they use a 'proper' advisor, if £1500 is considered cheap and 'suspicious'.

(a) The original poster has no idea what the CETV actually is, because he's confused it with something else.

(b) An LGPS pension is not comparable to a regular DC one, and it's unnecessarily confusing to conflate the two.