Old Pension Agreement

janesouthglos

I’ve just spoken with an independent pensions advisor.  He’s sent me the paperwork relating to a very old inflexible pension I took out back in the 80s. Apparently the government currently agree to pay a certain amount into it if I were to transfer it to a modern flexible pension - however the government “apparently” has the right to not pay their contribution if say - going forward - they decide they need to claw back money for the national debt. So he advises I should transfer it ASAP.  The amount is way under £50k even with the government contribution. The advisor’s charges are approx £1k to do the transfer - does the above sound a) right b) reasonable? 

coyrls

That's a load of twaddle.  If you are referring to the second state pension or SERPS the government no longer makes contributions.  There are no "claw back" arrangements.  Total nonsense.

dunstonh

I’ve just spoken with an independent pensions advisor.

I am just querying what this is given the misinformation you later describe.  An "independent pensions adviser" is not role that exists.    I am wondering if its an unqualified introducer or even a scammler.

Apparently the government currently agree to pay a certain amount into it if I were to transfer it to a modern flexible pension

That is either a lie or you have misunderstood. The government do not pay for you to transfer your pensions to a "modern" option.  However, it is the sort of statement a scammer may make.

- however the government “apparently” has the right to not pay their contribution if say - going forward - they decide they need to claw back money for the national debt. 

Complete and utter rubbish.

The amount is way under £50k even with the government contribution. The advisor’s charges are approx £1k to do the transfer - does the above sound a) right b) reasonable? 

Either you are being lied to or being scammed or you have completely misunderstood.

Did you approach this "adviser" or did they approach you?

Marcon

janesouthglos said:

I’ve just spoken with an independent pensions advisor.  He’s sent me the paperwork relating to a very old inflexible pension I took out back in the 80s. Apparently the government currently agree to pay a certain amount into it if I were to transfer it to a modern flexible pension - however the government “apparently” has the right to not pay their contribution if say - going forward - they decide they need to claw back money for the national debt. So he advises I should transfer it ASAP.  The amount is way under £50k even with the government contribution. The advisor’s charges are approx £1k to do the transfer - does the above sound a) right b) reasonable? 

If this 'independent pensions advisor' also independent financial adviser?

Tell us more about this curious pension. When was it taken out - can you be any more precise about the date? With whom was it taken out? What exactly does the paperwork he has sent you say about government contributions? Could be a real learning curve for virtually everyone on this forum...or a load of nonsense. But let's establish the facts first not least whether you could transfer it yourself and save £1K, say to a nice simple stakeholder pension with the Pru.

janesouthglos

Thanks for your replies. He’s a director of a financial planning company. It’s a “prosperity pension plan - with profit - defined contribution (money purchase). I opted out of a pension scheme when I worked for ba in the 80’s to a pension with Pearl who have since been brought over by Phoenix life. I’m going to contact them directly I think. 

xylophone

I’ve just spoken with an independent pensions advisor.  He’s sent me the paperwork relating to a very old inflexible pension I took out back in the 80s. Apparently the government currently agree to pay a certain amount into it if I were to transfer it to a modern flexible pension - however the government “apparently” has the right to not pay their contribution if say - going forward - they decide they need to claw back money for the national debt. 

I  don't quite follow this.

With regard to the pension, where is it held?  

very old inflexible pension I took out back in the 80s. 

Do you mean that in 1988 or thereafter you  "contracted out" into an "Appropriate Personal Pension" which received NI rebates? Contracting Out on this basis ended in 2012.

See  https://techzone.adviserzone.com/anon/public/pensions/Tech-guide-contracting-out

under  Appropriate Personal Pension

Or are you referring to a S226?

https://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/contract-based-schemes/retirement-annuity-contracts

I don't understand this reference to the government "paying a certain amount into the pension if you transfer to a modern plan" - are you referring to pension tax relief?

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

however the government “apparently” has the right to not pay their contribution if say - going forward - they decide they need to claw back money for the national debt.

I don't understand this either.  Do you mean that the government could decide not to grant tax relief on pension contributions?

Marcon

janesouthglos said:

Thanks for your replies. He’s a director of a financial planning company. It’s a “prosperity pension plan - with profit - defined contribution (money purchase). I opted out of a pension scheme when I worked for ba in the 80’s to a pension with Pearl who have since been brought over by Phoenix life. I’m going to contact them directly I think. 

You mean it's a mis-sold personal pension?

janesouthglos

Ok after phoning Phoenix turns out it’s their “terminal bonus” that could be pulled after all. They’ve confirmed the amount I could transfer and make no fees to do so. It’s such a small pot I’m going to try to save myself the £1k charge and do it myself. 

dunstonh

 It’s a “prosperity pension plan - with profit - defined contribution (money purchase). 

Prosperity was just the marketing name for the old Pearl Personal Pension.  Also known as version 1.  It was their first personal pension plan version following the launch of personal pensions in 1988.      It could accept personal contributions or contracted out contributions (not opted out as that means something else).

I opted out of a pension scheme when I worked for ba in the 80’s to a pension with Pearl who have since been brought over by Phoenix life. I’m going to contact them directly I think. 

Having done many Pearl V1 pension transfers, it is very easy to justify moving those to alternative modern providers most of the time.  So, that part does not concern me.   However, what you have been told or how you have interpreted what you have been told is a concern (the government pay nothing towards transferring and they cannot claw back any money from it).     

janesouthglos

I’m not sure if it’s a mis-sold plan? 

Albermarle

It’s such a small pot I’m going to try to save myself the £1k charge and do it myself. 

In case you are not aware , it is quite easy to transfer a pension your self.

First step is to open a new pension , mostly done on line nowadays . There are a lot of pension providers , some are simpler to operate than others with a limited range of investment choices. However this suits some people.

Request the new pension provider to transfer in the old pension . Usually no need for you to contact or make any request to the old pension provider.

The transfer will be made in cash and can take one week up to a couple of months .

Either before or after the cash arrives you need to decide how to invest it within the pension . If you are not sure on this part the forum can not tell you what to do but can point you in the right direction .

In the meantime this is a useful govt website .https://www.pensionsadvisoryservice.org.uk/