Cannot transfer a Pension

wayne1964

I have an old Final Salary Pension that I can obtain when I am 65 (I am nearly 55) which will give me a tiny Pension of just under £1800 PA. The Trustees want to wind the Pension up as I am the only one in it that is still of working age. The Transfer value one year ago was £63K. The new enhanced Transfer Offer is £123K (it has virtually doubled). I cannot get an IFA to deal with this and they all give different excuses. I have recently been made redundant and one IFA wont look at the it because they are terrified I will use the money to live on. They would sooner me and my family be made homeless. Another one said my attitude to risk was wrong. They asked me what it was from 1 to 5 with 5 been the riskiest. I gave 1 as the answer (as I thought this is what they wanted to hear) and was told I was too careful???? Can anyone help? As far as I am concerned, the transfer is a no brainer. I need an IFA that will not mess me about - any IFA will do and I don't care how much they charge to authorise the transfer. It's MY MONEY and I NEED to obtain it.

sandsy

It's never a no brainier to give up guaranteed income. Legally you can't give it up without taking regulated advice that may cost around £3-5k. An IFA won't recommend a transfer if they don't think it's right for you, whether you think you need the money or not. Many don't deal with transfer values below £250k because there's so many aspects to the advice and the regulator considers transfers to be a mis-sale, unless there is strong evidence why the transfer should happen.

The trustees can't force you to leave. It's not your money. They are holding funds in trust on your behalf and have promised to provide you with a pension for life from those funds. If they want to wind the scheme up, they should buy out your benefits with an insurance company.

wayne1964

Thank you for your comments. They don't fill me with hope and I am at my wits end worrying about this. I need that transfer to stop me and my family becoming homeless and so anything that stops this is bad financial advice - that IS a no brainer. Just one question if you wouldn't mind - what does "If they want to wind the scheme up, they should buy out your benefits with an insurance company" mean please?

AnotherJoe

By telling the broker you were extremely cautious / risk averse, you guaranteed they wouldn't work with you on a transfer because you immediately made a missale complaint against them (if they proceeded) a slam dunk.
There is a big risk managing a pension pot yourself and by stating you were low risk you ruled yourself out from doing that.
I presume your plan is indeed to take the money and then spend it down? If that works for you you'll have to restate your attitude to risk to be high and start with new brokers. I would get a move on because it will be attractive at the figures you've quoted, for the company to sell your pension on to a third party to get rid.

wayne1964

Thank you for your reply. The problem I have is finding a broker. Yes you are correct the figures are attractive. Do you know of an IFA that would at least consider helping me? Thanks.

AnotherJoe

It is difficult finding brokers because then presumption the regulator makes is that it's against the interest of most customers and they take an overly harsh attitude and punitive approach scaring most off. you'll just have to keep looking, I don't know any because I DIY so don't use one.

shinytop

I think the IFA is going to be looking at it from the viewpoint of your pension provision, not as a way of solving short term financial issues. If you are having financial/housing issues you might be better off posting on the debt/housing boards for help. The IFA will also look at your other pension provision; if you are well provided for via other arrangements it might make your case for transfer better. If this is all you have then they might conclude that to use it to solve a short term financial problem is not in your overall best interests. Good luck in sorting this out.

Linton

wayne1964 wrote: »

Thank you for your comments. They don't fill me with hope and I am at my wits end worrying about this. I need that transfer to stop me and my family becoming homeless and so anything that stops this is bad financial advice - that IS a no brainer. Just one question if you wouldn't mind - what does "If they want to wind the scheme up, they should buy out your benefits with an insurance company" mean please?

It means that the scheme pay a one-off sum of money to an insurance company and the insurance company take on the responsibility for providing you with the pension.

Dox

wayne1964 wrote: »

I have an old Final Salary Pension that I can obtain when I am 65 (I am nearly 55) which will give me a tiny Pension of just under £1800 PA. The Trustees want to wind the Pension up as I am the only one in it that is still of working age. The Transfer value one year ago was £63K. The new enhanced Transfer Offer is £123K (it has virtually doubled). I cannot get an IFA to deal with this and they all give different excuses. I have recently been made redundant and one IFA wont look at the it because they are terrified I will use the money to live on. They would sooner me and my family be made homeless. Another one said my attitude to risk was wrong. They asked me what it was from 1 to 5 with 5 been the riskiest. I gave 1 as the answer (as I thought this is what they wanted to hear) and was told I was too careful???? Can anyone help? As far as I am concerned, the transfer is a no brainer. I need an IFA that will not mess me about - any IFA will do and I don't care how much they charge to authorise the transfer. It's MY MONEY and I NEED to obtain it.

If you are saying your employer is carrying out an enhanced transfer exercise (and it is the employer, not the trustees, who would be doing this), they should be offering free independent financial advice from an IFA who is authorised to advise on transfers. Start there - but bear in mind the clock is ticking on a transfer which is only valid for 3 months (i.e. you have to accept it within that timeframe if you wish to proceed).

nigelbb

I think that you need to play the game & tell the IFA the answers that they want to hear. !!!!!! don't tell the IFA you want to transfer so you have money to live on until you receive other pensions. What you do after you have taken advice & done the transfer is up to you it's just that you have to make the case that it's a sensible thing for you to transfer out of a DB scheme & still provide you with a decent pension. In this case with an enhanced transfer value of nearly 70x it looks like a you could do much better pension-wise with 123K in a SIPP & this is what you need to emphasise.

saver_ali

I'm not saying that this is the right way to go, but I think I've seen in previous threads on here that there are some SIPP providers that will accept transfers from DB pensions even if the IFA advice is not to transfer out.
I can't remember the details, but you could try to search this forum for threads about transferring out from DB.