Can’t find an IFA to advise on DB transfer because on increased PII and sub £100k pot!

Jeffmusicals

Hi,
This is my first post so apologies in advance if it’s inappropriate or the wrong place but here goes anyway!

My wife and I both worked for Nat West in the 80’s, and she did just over 6 years. She turns 55 next month and we have previously spoken with our IFA about wanting to take the “pot” as we wanted to buy a house in France. Back in June he seemed very positive but following a visit the other day he has told us there is nothing he can do to help us (and doesn’t think anyone will) because of increasing PII costs and the worry about future “mis-selling” allegations.

The GTV stands at £85k and likely to increase to £91k on the scheme anniversary next month. This is made up of £37k GMP and £47k other rights. Current options are to take a lump sum of of £12k and £1800pa or no lump sum and £2350pa. Dependants pension is £225pa! She has Worked for the local authority one and off and self employed for the last 8 years so Not reall other pensionS to speak of. 

The reality is that we see this transfer value as “superfluous to requirements” and the realty of such a small additional income on retirement is neither here nor there. We want to use the money to buy a house in France NOW so we can enjoy it and provide holiday opportunities for  our 4 grown up children. We understand the it is index linked and the pension income will increase but I have an extremely good historical DB scheme from my current employer (16 years and frozen now) , good contributions into my current DC scheme (15% employer contribution plus 3% AVC matched), share save scheme etc. I will continue to work until 62 (another 8years) and have a good package so will enjoy good pension options. We will both be entitled to full state pensions.

whilst I understand that it is not often advised to exit a DB scheme, this is the only ti,e that we will be afforded with the opportunity to take a lump sum that we never expected, provide a benefit now to us and our children, and it will not materially impact our retirement. 

However, despite the Pensions Freedom I am now finished with being unable to get sign off from an IFA, even on an insistent client basis, because of the concerns previously stated and possibly the small size of the pot. I’m not “ignoring” advice, I am asking for my specific circumstances  to be taken into accountant for us to do with what we choose with “our money” and absolving our advisors of any responsibility. We are reasonably sensible, financially savvy people. We don’t have a fortune in liquid assets but seem to be stuck between a rock and a hard place. Any views/advice/recommendations would be appreciated. Do you think the FCA would be able to assist me in finding someone to assist?

Sorry if this sounds selfish or not respectful of IFA’S experience and advice but it looms like they would have done it 6 months ago before contingent charging was abolished. Thanks in advance

semiplural

Hi Jeff,
I am just in the course of transferring out (hopefully) from my DB - having just got under the wire of the recent changes on contingent charging.
It would be wrong of my to offer a recommendation given that I have not yet got to a positive outcome, but I found Brian at sippclub.com to be very helpful in steering me though the process. Of course he gets a commission (why would he do it otherwise), but I don't think it is unreasonable. He won't give you advice directly (although will explain the process) but will recommend you on to someone. Brian has given me some good support so far, so to this extent I would recommend at least speaking to him.

 

xylophone

The pension is your wife's.  Her other provision seems very modest - small LGPS and full state pension at 66/7?

It may well be that in such circumstances, the  Pension Transfer Specialist would not recommend a transfer.

Provided that she obtained confirmation that the advice had been obtained, she could still transfer out although her choice of providers would be limited.  That said, a stakeholder scheme would be obliged to accept a transfer in.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/transfer-pension-scheme/
https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/pension-transfers-conversions/

Once transferred, the pension could be accessed but only 25% would be tax free. The balance would be taxed as income in the year of receipt.

https://adviserbook.co.uk/  She would tick confirmed independent and pension transfer when the menu comes up.

https://www.fca.org.uk/firms/financial-services-register

tacpot12

The FCA certainly won't help to find someone. You need to search for an adviser who will advise you. You won't get a recommendation on this site as we can't predict whether any particular IFA will be prepared to advise you. 

The best approach it is to play it cool; ask for the advice you need, tell them you have an open mind, but tie them into signing the paperwork you need for the transfer regardless of the advice (you need to do this in your fee schedule). When they tell you not to do it, get them to sign the paperwork to say you have had the advice and transfer it yourself to a SIPP, then draw the money out. 

You are aware that 75% of the sum will be taxed as income? 

Linton

The FCA wont help you find someone to do the work - it's not their role.  FCA policy is to tighten the requirements for people to "cash-in" DB pensions.  You cannot absolve the advisor for any responsibility - the advisor is absolutely responsible for the advice given. You say that it is up to you to choose what to do with "your money".  But it is not your money, it is money held in trust for your benefit which is rather different.  The pension is what you (or was it your wife) signed up for when you/she joined the scheme.
Unless you can find an IFA willing to do the work, the only person who can help is your MP who could try to get the law or the regulatory requirements changed but I can't see a proposal to reduce pension safeguards going down well.

GSP

And to make you aware, over £50,000 of taxable money may attract 40% tax.
Maybe best to take out over at least a couple of years to pay less tax, unless you want to ‘cut and run’ pretty quickly.

Thrugelmir

Jeffmusicals said:

 Do you think the FCA would be able to assist me in finding someone to assist?

The answer to that question is no.
 Been well discussed in the past that many firms no longer see DB transfers as a viable business activity to undertake now that they under intense regulatory scrutiny. . 

Dazed_and_C0nfused

GSP said:

And to make you aware, over £50,000 of taxable money may attract 40% tax.

This ^

Your wife's £91k could easily become more like £70k after IFA fees and (non refundable) income tax is taken into account.

And that assumes she has zero other taxable income in the year she takes it all.

If she was already earning say a modest £10k then the tax alone would be closer to £19k so almost certainly sub £70k after IFA fees. 

We will both be entitled to full state pensions.

Has your wife checked her State Pension forecast (including the amount accrued to date) or is this based on the assumption 35 years is important?

Jeffmusicals

Thank you all for your helpful comments so far (wish I could work out how to comment on each reply!) but I’ve responded below:-
 1. I appreciate that their advice may be not transfer but I would then become an “insistent client” which many advisers won’t accept now I understand
2. I am aware of the tax implications. Plan would be take 25% tax free, and then split the remainder over March/ April for 2 tax years. Her current income is low part time so we would see some benefit from tax allowance and happy to take the 20% hit on the rest. Please remember this is money we never expected, never knew we had and the yearly income will be immaterial to us. That sounds awful I know but...
3. Linton, we will have to agree to differ 😊
4. State pensions checked on the Govt web site.
5. Again I understand people’s sentiments but as I’ve said, the monthly income is inconsequential and this was a 6 year held scheme 30+ years ago. We never relied on it. My wife has mainly looked after our kids so have been a mainly 1 income family for most of our lives with our retirement planning centered around my Income, rightly or wrongly. Guess I’ll keep searching for an IFA that understands both our current and future needs 😀

Albermarle

I appreciate that their advice may be not transfer but I would then become an “insistent client” which many advisers won’t accept now I understand

It is the pension providers who will not accept a transfer from an insistent client , but a few will, so this is less of an issue than finding an advisor .

My SIPP provider does not accept insistent clients but they seem to be willing to offer advice on DB transfers. Not sure what happens if their advice is not to transfer though ?

https://www.fidelity.co.uk/fidelity-retirement-service/

[Deleted User]

I believe a firm called Pensionhelp are now assisting a poster in the same bind as you, Jeffmusicals. A couple of other posters said the firm worked well for them.
 https://forums.moneysavingexpert.com/discussion/6189721/anyone-dealt-with-this-company/p1
You could message them to see if their service is suitable for you. If you go with Pensionhelp, you won't need to find an IFA on top.