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1987 Scottish Widows "with-profits policy"

I was persuaded to take this out by my father in 1987 and contributed to it for a few years - I suppose I put on the application form "retirement age 60", in 1987, in my mid 20's I probably didn't give it much thought. It's worth about £30k now and the stated retirement date is 2022.
Along the way I have had various stakeholder pensions which I have amalgated into a diy II SIPP a few years ago (from good advice on MSE)
About 10 years ago I had an IFA sift through my pension affairs and he advised not to touch the Scottish Widows pension - so I haven't.
I suppose it is an obsolete product/concept now. It looks pretty dull the top 10 ten companies are mostly UK dinasaurs (HSBC, Shell, BP, AZ, Glaxo, BAT, Lloyd, Diageo etc).
So it matures in 2022, and I wondered what my options will be. I currently pay about £40k via SS to pension (again, good advice from MSE!).
If the SW policy matures will I have to take it, and would that limit my ability to pay SS into SIPP (MPAA) ?, will I be able to transfer intact to II ?
 or would I be able to leave it with SW...?
I am sure SW will advise me nearer the time, but if anyone could offer an idea of the possible options I would be very grateful so I can pre-plan.

Comments

  • Albermarle
    Albermarle Posts: 28,798 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    edited 1 February 2021 at 6:23PM
    If there are no guaranteed benefits associated with it , then should be no problem to transfer it to II ( I transferred a SW with Profits to Fidelity last year and no issues , took less than two weeks.) 
    If you leave it with SW , you will probably have limited options how you take the pension ( annuity or lump sum probably ) 
  • dunstonh
    dunstonh Posts: 120,108 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    About 10 years ago I had an IFA sift through my pension affairs and he advised not to touch the Scottish Widows pension - so I haven't.

    Personal pensions as we know them today were introduced in 1988.   So, a 1987 plan would be a section 226 retirement annuity contract.  A lot of these have guaranteed annuity rates or even guaranteed minimum maturity values.  SW themselves were doing Guaranteed annuity rates until 1995.  So, a GAR is quite possible and would explain the IFA telling you to leave it alone.

    I suppose it is an obsolete product/concept now.

    Seeing as they were replaced a year later, you could argue that.  However, not everything old is bad.  There are some gems in with the rubbish.

    So it matures in 2022

    Its more likely that it doesnt mature until you are 75 but 2022 is the originally selected date for the plan.  You are not held to that.

    If the SW policy matures will I have to take it, and would that limit my ability to pay SS into SIPP (MPAA) ?, will I be able to transfer intact to II ?

    you say you are coming up to 60. So, you can defer it to up to 75.  

    If there are safeguarded benefits, you would need an IFA to give advice on it.  

    I am sure SW will advise me nearer the time,

    SW dont provide advice on legacy plans.  They are largely reactive but will ultimately defer it if you dont contact them.


    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Ciprico
    Ciprico Posts: 661 Forumite
    Part of the Furniture 500 Posts Name Dropper
    Thanks Dunstonh, it refers to guaranteed benefit (25K) and existing bonus (6k), making total Guaranteed Benefit £31k, it doesn't increase in value year to year.
    It says "...policies which started before 15th feb 1999 already have higher guarantees, so we are not adding regular bonuses..."
    I think I was told by IFA if a moved it I would lose the bonus, but now I am over 55, so can take a pension,  (I am 58), should I be able to transfer to SIPP without losing out. I would rather it were in a tracker/VLS and take my chances than remain static for the next few years. I am pretty sure I won't want an annuity...
  • dunstonh
    dunstonh Posts: 120,108 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Thanks Dunstonh, it refers to guaranteed benefit (25K) and existing bonus (6k), making total Guaranteed Benefit £31k, it doesn't increase in value year to year.
    SW stopped bonus on plans with GARs or guaranteed minimum maturity values as that is there the real value is.  They hope people will transfer out and remove their liability under the gurantees.

    I am pretty sure I won't want an annuity...
    You should do if it pays 10%+ per annum.    The more that pays, the less you need to draw on your other bits.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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