Lump sum from Deferred Annuity ... "pension freedom" ?

sandsy

DaveMcG wrote: »

This will not be a "retirement annuity" (S226) contract. It will almost definitely originate from a wound up defined benefit scheme, as posted above, and will be a safeguarded benefit, as you say.

The Pru sold with and without profit deferred annuities in the 1970s and early 80s that we're not DB buyouts and which were retirement annuity contracts, prior to the introduction of personal pensions.

mwhit

So the question remains: the "rules" seem to require a transfer "out" to another pension, in order to take the early 25% or whatever; So I require the most minimal (ie least costly) vehicle to execute this.


It really is bureaucracy for its own sake, with fees.

JoeCrystal

I am afraid that it is still likely to cost you several thousand pounds in fees. Just out of curiosity, what is the annuity from it? I am just wondering how generous it is.

SonOf

It really is bureaucracy for its own sake, with fees.

Your plan never offered the option you want. Now you want something different. So, cost is quite normal when you change products in all areas of retail.

mwhit

" Now you want something different. So, cost is quite normal when you change products in all areas of retail."


Well, the scheme was originally a pension scheme (Ferranti), so I never asked for it to be converted into a deferred annuity either !


And now the benefits of the Osborne reforms are denied me, or at least will cost an amount for which I see no benefit except to the corporates.


Having a look around the MSE website looks as if I should transfer the entire scheme into a no-fee SIPP, (eg Close Brothers) then take the 25%.

Brynsam

mwhit wrote: »

" Now you want something different. So, cost is quite normal when you change products in all areas of retail."


Well, the scheme was originally a pension scheme (Ferranti), so I never asked for it to be converted into a deferred annuity either ! You would have been given plenty of notice that this was going to happen, so could have transferred out - although given that there is precious little difference between a deferred pension with your original scheme, and a deferred annuity, it is really a matter of style over substance.


And now the benefits of the Osborne reforms are denied me, or at least will cost an amount for which I see no benefit except to the corporates. They are not 'denied' to you. You are simply subject to the same legislation as everyone else - and it may not be in your interests to do what you want to do, however much you like the idea of getting your hands on the cash. Cash always looks so attractive...


Having a look around the MSE website looks as if I should transfer the entire scheme into a no-fee SIPP, (eg Close Brothers) then take the 25%.

You may have trouble finding an adviser to will advise you at all, never mind recommending a transfer to a SIPP - and some SIPP providers will only take transfers with evidence of a positive recommendation.

However enticing the cash looks, you may find that once you've been through the advice process (which you'll have to do if you want to consider transferring out), it doesn't look quite as good as you first thought. Possibly taking maximum tax free cash from the deferred annuity, plus pension, may be a viable and financially better option?

JoeCrystal

mwhit wrote: »

And now the benefits of the Osborne reforms are denied me, or at least will cost an amount for which I see no benefit except to the corporates.


Having a look around the MSE website looks as if I should transfer the entire scheme into a no-fee SIPP, (eg Close Brothers) then take the 25%.

As we said earlier on, you would need to find an IFA to offer you advice since it is safeguarded benefit. It is not that straightforward as simple transfer to the SIPP, I am afraid.