Pension Pot - How to withdraw full cash amount

Emmroyd

Thanks all, everyone’s comments are welcome and I agree he’s probably a fool to want to pass on the annuity, will show him the comments to see if it changes his mind (but I doubt it!). I understand why Pru were insistent on him obtaining the advice as it’s a legal requirement but he’s done everything they asked and still he can’t draw his money, but possibly this is due to the FOS decision as mentioned by SonOf. Thanks again everyone your help and advice is appreciated

xylophone

I understand why Pru were insistent on him obtaining the advice as it’s a legal requirement but he’s done everything they asked and still he can’t draw his money,

Does the adviser he consulted have pension transfer permissions?

If so, has he provided your brother with his written advice?

Has your brother paid the adviser?

xylophone

Does the Pru pension permit him to take the PCLS and an annuity with the remainder?

SonOf

Does the adviser he consulted have pension transfer permissions?

GARs have a limited permission which allows non-pension transfer specialists to transact in that area. it is a permission that needs to be applied for and virtually every IFA will have it (if they don't have the full one). However, tied sales forces may not have it.

I have just looked at the FCA register for Prudential Financial Planning Ltd and they DO NOT have the permission required to provide advice when a GAR is not being taken.

jamesd

Emmroyd wrote: »

The GAR is about £5k per year which even he accepts is good

It's not just good, it's great. On a 55k pot that's 9%. Pru's accountants would love it if he took the money instead!

So, first thing is that no advice is required to take the tax free lump sum. That's because it's not a safeguarded benefit. So he can get the 13.75k tax free and cut the annuity income to 3712 a year.

Emmroyd wrote: »

a couple Of reasons including his current work and health situation (back issues, not life threatening) and he has lost a couple friends/family of a similar age recently.

Understandable and it's easy for me to support him in wanting to become retired.

I think there's a better way of getting there than his plan, though, one that should end up leaving him better off and retired: equity release, or an alternative retirement lending product. Those aren't just the old borrow for life type, you can repay on some types.

The general idea is that he borrows enough to pay monthly or repay the current mortgage and live on until state pension age. Then he uses say three quarters of the 5k to repay and keeps the quarter as extra income for himself. Or he works out what it'd take to repay over say twenty years and keeps the rest.

That takes care of his current needs and makes him better off long term by the bit he's keeping.

Nullboris

Isn't there some possibility that as his GAR is so good that the PRU would purchase his policy and pay him a greater lump sum ..i.e in the way that Uncivil Servants are being offered LARGE sums for their pension pots??
This may be completely worng ofc IanAPL

SonOf

Isn't there some possibility that as his GAR is so good that the PRU would purchase his policy and pay him a greater lump sum

No. That would require it going to the high court for approval and Pru have not made any noises on that front.

.i.e in the way that Uncivil Servants are being offered LARGE sums for their pension pots??

Which one are you referring to as the abilty to transfer most Govt backed schemes (the unfunded ones) was ended a few years back

xylophone

Which one are you referring to

I am assuming he means those who are not in unfunded public service schemes rather than rude employees of the state...:)

greatgimpo

For the sake of clarity (to me), I want to ask a question related to this thread. Simple figures rounded for ease.

Pension pot of £80k. When I retire, my state pension will be £8,000 per annum as standard. I take 25% out of my pot, tax free leaving £60k. Assuming bottom tax bracket continues starting at £12,000, can I take out £3,999 per year out of my pot for 15 years so that I never hit the bottom tax bracket or will the remaining £60k always be taxed?

ffacoffipawb

greatgimpo wrote: »

For the sake of clarity (to me), I want to ask a question related to this thread. Simple figures rounded for ease.

Pension pot of £80k. When I retire, my state pension will be £8,000 per annum as standard. I take 25% out of my pot, tax free leaving £60k. Assuming bottom tax bracket continues starting at £12,000, can I take out £3,999 per year out of my pot for 15 years so that I never hit the bottom tax bracket or will the remaining £60k always be taxed?

Yes you can, and in that scenario, no it won't.