IFA advice on pension transfer

Albermarle

My wife transferred a pension scheme worth £135K from Aviva to PensionBee in a similar manner, no problems.

If it is straight DC to DC transfer , there are no problems because you are not giving anything up , just changing provider.

Normally the problem is when people want to transfer DB/final salary schemes to a SIPP . This is a big financial decision and lots of scandals /misselling issues in the past . I would have thought the level of financial advice needed to transfer from a pension with just some guaranteed rights could be a bit less/cheaper than a full DB transfer , but I could be wrong.

Albermarle

edit: quote option isnt working on the new forum layout.  So, bolded your text.

You can also highlight the text , click on the symbol sixth from the left ( with the arrow next to it ) and then in the dropdown box you will see an option 'quote' .

xylophone

Because my Prudential pension scheme is an old type with a "valuble pension guarantee" I am hitting a brick wall. It seems that the law says I have to under go a full financial assessment costing between 3 and 4% (plus VAT). 

The pension has a "safeguarded benefit" - therefore you must take  financial advice - see links in my post above and in particular from Prudential:
Although GARs are safeguarded benefits, the FCA have decided not to require these cases to be checked by a pension transfer specialist and as such advice can be provided by an adviser with investment advice permission. This is because an adviser with the investment advice permission, but not the pension transfer and opt out permission, must still prominently highlight the value of the GAR to their client (the firm still needs to hold transfer permissions). The adviser should do this as part of the suitability assessment report for their client.

SonOf

John17Mal said:

The pension in question is an old style Prudential personal pension plan "with profits" and with a "valuble pension guarantee". It is presently worth £124K.
Last year I transferred a Clerical Medical pension worth £105K into my SIPP with no questions asked. It took about two weeks.
My wife transferred a pension scheme worth £135K from Aviva to PensionBee in a similar manner, no problems.
Because my Prudential pension scheme is an old type with a "valuble pension guarantee" I am hitting a brick wall. It seems that the law says I have to under go a full financial assessment costing between 3 and 4% (plus VAT). 
I understand that investing in a SIPP has down sides but a prefer to have a fund that can at least in part be passed on to my heirs on my demise.

Your Pru personal pension is not an annuity.  It is a personal pension.  
As it has a safeguarded benefit and is over £30k in value, you are required to take financial advice as its statistically likely that the existing Pru pension is the best option for you.  It is to prevent you from making a mistake.
There is no VAT on adviser fees where the intention is to buy a product through the adviser.   There is VAT where there is no intention to buy a product through an adviser.
Why do you think the Pru pension cannot be passed on in the event of death?   - if this is your reason alone, then you would expect a transfer not to be recommended as your reasons are flawed.
What are the guarantees?  (typically with Pru it is a guaranteed annuity rate, sometimes dressed up a guaranteed basic annuity or words to that effect).   Usually when I come across these, they are the equivalent of 7% a year or more.   I have seen double digits in the past. 

AnotherJoe

John17Mal said:

I want IFA advice on transferring a Prudential Annuity to a SIPP. I want to be aware of any pitfalls. I do not want a full blown assessment of my financial status. I am prepared to pay a reasonable fee for the former but I am being quoted large fees running to £3-4K  for the latter!

They are legally obliged to do so, so thats a non starter.

If you post the basic numbers here and what the guarantee is, you'll at least get some comments on where it lies on the scale from awful to awesome.

John17Mal

Numbers:   Basic annuity:  £4,679.03          Reversionary Bonus to date     £2,469.03           Total £7,148.06
Guarantee? Not sure what that is. They promise to pay me £7,148.06 per year until I die.
Options: I could take 25% tax free, I could ask for a minimum term of 10 years, I could ask them to pay my wife after my death. All these obviously reduce the sum that I would receive.
I did think about all of the above and link the sum paid to the RPI but the Pru don't do that and they offered a a list of companies to whom I could transfer.
The reversionary bonus increased the value of the pension considerably in the early years but the bonuses are much reduced over the last decade or so.
In the end I decided to put the money into my SIPP (which has done very well over the last year, up 12%). I intend to move into drawdown and take 25% tax free and about 4% annually (this would be largely covered by the dividends that I receive).
If moving money into a SIPP is a "high risk transaction" why was I allowed to move my Aviva personal pension last year. What is so fundamentaly different with my Prudential plan?
                  

want_to_save

John17Mal said:

Numbers:   Basic annuity:  £4,679.03          Reversionary Bonus to date     £2,469.03           Total £7,148.06
Guarantee? Not sure what that is. They promise to pay me £7,148.06 per year until I die.
Options: I could take 25% tax free, I could ask for a minimum term of 10 years, I could ask them to pay my wife after my death. All these obviously reduce the sum that I would receive.
I did think about all of the above and link the sum paid to the RPI but the Pru don't do that and they offered a a list of companies to whom I could transfer.
The reversionary bonus increased the value of the pension considerably in the early years but the bonuses are much reduced over the last decade or so.
In the end I decided to put the money into my SIPP (which has done very well over the last year, up 12%). I intend to move into drawdown and take 25% tax free and about 4% annually (this would be largely covered by the dividends that I receive).
If moving money into a SIPP is a "high risk transaction" why was I allowed to move my Aviva personal pension last year. What is so fundamentaly different with my Prudential plan?
                  

you were allowed as you say to put the aviva pension into the SIPP as it has no with profit guarantees or safeguarded benefits.

they want you to get advice as you are potentially giving up a valuable annuity by wanting to transfer away.  If you dont like the fees being charged by that IFA look for antoher one.

Prism

John17Mal said:

In the end I decided to put the money into my SIPP (which has done very well over the last year, up 12%). I intend to move into drawdown and take 25% tax free and about 4% annually (this would be largely covered by the dividends that I receive).
                  

Just a couple of points to put this into perspective. 12% over the last year is actually a pretty poor return vs most benchmarks and you generally would need to return much better than that during the good years if you hope get close to a 4% withdrawal. 4% withdrawal is probably too high at the moment - I would start safer at around 3% for the first few years unless the economic situation changes over the coming years.

xylophone

If moving money into a SIPP is a "high risk transaction" why was I allowed to move my Aviva personal pension last year. What is so fundamentaly different with my Prudential plan?

Have you  read  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

SonOf

John17Mal said:

Numbers:   Basic annuity:  £4,679.03          Reversionary Bonus to date     £2,469.03           Total £7,148.06
Guarantee? Not sure what that is. They promise to pay me £7,148.06 per year until I die.
Options: I could take 25% tax free, I could ask for a minimum term of 10 years, I could ask them to pay my wife after my death. All these obviously reduce the sum that I would receive.
I did think about all of the above and link the sum paid to the RPI but the Pru don't do that and they offered a a list of companies to whom I could transfer.
The reversionary bonus increased the value of the pension considerably in the early years but the bonuses are much reduced over the last decade or so.
In the end I decided to put the money into my SIPP (which has done very well over the last year, up 12%). I intend to move into drawdown and take 25% tax free and about 4% annually (this would be largely covered by the dividends that I receive).
If moving money into a SIPP is a "high risk transaction" why was I allowed to move my Aviva personal pension last year. What is so fundamentaly different with my Prudential plan?
                  

The value on this plan is the guarantees.   It is a different way of giving you a return.   So, they dont need to add bonuses like they did in the early days as back then, they thought 15% a year returns were the norm and the guarantee would not come into play.
Your Aviva pension was not a high risk transaction as it did not have any safeguarded benefits.   Your Pru pension does.  And in most cases, people are best sticking with the plan with the safeguarded benefits.

You may well be better placed not taking money from the SIPP but using the guarantee instead.    This is why an adviser needs to be involved as you could be making a mistake.