Section 32 pension about to close - what to do?

Blackavar

Yes, that was Plan A. But the IFA would not sign off on this as we already have cash in premium bonds. Also Aegon say that if TFC is withdrawn, the remainder goes to to another Aegon product, and at this point they will only act on instruction from a FA. This is a major problem for me as this pension concludes in 7 days time.

Malthusian

Blackavar wrote: »

I have been all over their website for a long time and am struggling to understand the difference between the ARC and Retireready product.

ARC is their advised product. Retireready is their direct-to-consumer product. They were reportedly considering scrapping it in 2018 and focusing on the advised market.

Nothing further has been heard on that front and I suspect Aegon has been too distracted with the Cofunds debacle to think about that further.

However the change of strategy may explain why Aegon is so reluctant to deal with you directly despite having a direct-to-consumer pension product.

After the vandalism job they did on Cofunds, Aegon focusing on the advised market is a bit like Labour attempting to get out the Jewish vote right now. So the lack of further news on whether they're going to scrap Retirereready is not surprising.

xylophone

Retireready is their direct-to-consumer product

In which case he can take the PCLS, put the balance in RetireReady ( as he doesn't need the IFA) and then transfer RR to a SIPP in due course?

Blackavar

Aegon will not allow me to take the PCLS without sign of from a financial advisor. It’s just crazy. My current FA will not sign this off as he says we have too much cash but wants access to my other pots to manage (won’t happen). I am really against the clock with this. If push comes to shove I believe I can move to retireready and retain the tax free possibility. I would much rather take the tfc prior to doing this to top up ISA’s.

xylophone

Aegon will not allow me to take the PCLS without sign of from a financial advisor.

But you can transfer the whole into RR without advice from an (I)FA?

https://retiready.co.uk/public/shop/retiready-pension.html?u=P

If so, you can then take your PCLS and then transfer the balance elsewhere?

Or am I misunderstanding the situation?

Blackavar

This is what I will try and do although I still ,Amy need sign off from FA to get PCLS. Thanks for your input.

xylophone

Let us know how you get on.

Malthusian

Blackavar wrote: »

Aegon will not allow me to take the PCLS without sign of from a financial advisor. It’s just crazy.

If you were transferring, plans with enhanced tax free cash come under the "safeguarded rights" rules (i.e. you need advice independent of the scheme to transfer it if it is worth more than £30k).

Crystallising an existing plan does not legally require advice. Aegon's requirement would appear to be self-imposed and they have every right to impose it. If you draw benefits directly from the scheme without advice, Aegon are first in line for any complaint.

My current FA will not sign this off as he says we have too much cash but wants access to my other pots to manage (won’t happen).

You shouldn't need an IFA to say it's a good idea. Confirmation that they have given advice should be sufficient. Otherwise, given that the requirement is self-imposed by Aegon (as this is crystallisation within an existing scheme rather than transfer) it's obstructing you from taking your benefits.

Do Aegon require a positive recommendation or do they just require confirmation that advice has been taken?

Blackavar

Update. Long chat with Aegon. It seems that at the end of the month, the section 32 policy remains as a pot but but all funds are converted to cash. I am then free to decide where this is invested (happy to do this) and the large tax free potential remains with the pot. This apparently will still be called section 32 plan and not a SIPP. If I move the pot to Retireready, then I lose the potential tax free element. This is not was I was previously led to believe. They were also adamant that they would need to see positive FA sign off before I could get the tax free element. It is extremely annoying that I will probably have to pay a few thousand pounds for the FA to say he is happy so that I can access my cash which will be used to top up ISAs, not go on a cruise.

xylophone

I am really very puzzled.

You have a S32 policy but it does not have any GMP.

The policy reaches maturity and you are entitled to take benefits.

It happens that this policy gives you the right to a higher than normal tax free PCLS.

Why on earth do you have to take the advice of an IFA before being able to exercise what appear to be your rights under the policy, which is to say a PCLS and the rest paid as a pension?

What exactly does your policy document say about taking benefits?