Query re Impending Change to Pension

davidwatts

This is genuinely an "asking for a friend" scenario. Before I give a brief chronology, the key questions can be summarised as:

Is anyone familiar with the Legal & General WorkSave Mastertrust scheme?

Can anyone give a view on its pros and cons in comparison to the Royal Bank of Scotland Group Retirement Savings Plan scheme?

Brief history:

• Employed by ABN Amro and build up a DC pot of £17k in the ABN scheme
• Employment transfers to RBS and new contributions go into the RBS scheme
• In 2012 the ABN pot is transferred into the RBS scheme
• On leaving RBS for a new job, total pot value is around £70k
• April 19, letter from RBS stating they've "found an issue" whereby the protected pension age (50) for the ABN scheme was lost at the time of the transfer
• To rectify this, the £17k ABN pot will be briefly transferred back to the RBS scheme and then into the L&G scheme where it will once again have the protected age
• If not wishing to move to the L&G scheme, there is an option to transfer back to the RBS scheme

My friend has no interest in getting the protection back (52 now and no intention of accessing any pension before 55) so it just comes down to which scheme is best. The L&G scheme seems to have lower fees and also offers flexible drawdown which isn't an option under the RBS scheme. He also has a few other small DC pots which he may wish to consolidate at some point.

Any views on the schemes mentioned or additional points that should be considered?

Albermarle

The L&G scheme seems to have lower fees and also offers flexible drawdown which isn't an option under the RBS scheme.

Well if your friend wants to go with flexible drawdown, then that answers your question .

He also has a few other small DC pots which he may wish to consolidate at some point.

This makes sense , especially once he retires and starts taking income . It is simpler to administer with one or max two pots If they are older then they will most likely not support drawdown anyway , so to go down the drawdown they would have to be transferred anyway .

davidwatts

Thanks for that. Yes, he would have to transfer out of the RBS scheme in order to go with drawdown so there may be some benefit in opting for the new L&G scheme. He'd have to transfer the rest of his RBS pot across though as there's a £30k minimum to drawdown from the L&G scheme. But it wouldn't make sense to keep the pot split in two anyway so I think it should be all in one or the other.