Confused around partial crystallisation of pension

Quorden

Hoping someone may be able to clear up some confusion I have around advice I've received from an IFA on an old pension that I have.
Some background is that I'm 52, not planning on retiring for a good few years and am currently in the lucky position of being able to max out both my pension and S&S ISA contributions.

Although I have already consolidated a number of my smaller pensions I took advice on one pension, circa £300k and it turns out that it is slightly unusual in that it has protected pension age of 50 and a protected cash free amount of £100k. Neither of which really concern me as currently I can't foresee any reason why I'd like to retire early or why I'd suddenly need £100k tax free though admittedly I don't have a crystal ball.

What has been suggested is that I let the IFA manage £200k , crystallize the remaining £100k, then over the next how ever many years use that crystallised money to fill up future ISA's.

The two things that are confusing me are what happens to the crystallised funds in the interim, my limited understanding is that they kind of gather dust for want of a better word and that would leave me with about a third of my money not doing a lot. Also as I'm not interested in the early retirement or taking the £100k tax free is it possible to just transfer all of it, must be a reason he didn't advise this as I would have thought he'd prefer to take on the whole amount. Also re-reading this draft if I'm already maxing out pension and ISA'a not sure where I could put that £100k anyway.  Life was so much simpler before I tried to understand my finances

Any clarity on this would, as always, be greatly appreciated.

Marcon

Quorden said:

Hoping someone may be able to clear up some confusion I have around advice I've received from an IFA on an old pension that I have.
Some background is that I'm 52, not planning on retiring for a good few years and am currently in the lucky position of being able to max out both my pension and S&S ISA contributions.

Although I have already consolidated a number of my smaller pensions I took advice on one pension, circa £300k and it turns out that it is slightly unusual in that it has protected pension age of 50 and a protected cash free amount of £100k. Neither of which really concern me as currently I can't foresee any reason why I'd like to retire early or why I'd suddenly need £100k tax free though admittedly I don't have a crystal ball.

What has been suggested is that I let the IFA manage £200k , crystallize the remaining £100k, then over the next how ever many years use that crystallised money to fill up future ISA's.

The two things that are confusing me are what happens to the crystallised funds in the interim, my limited understanding is that they kind of gather dust for want of a better word and that would leave me with about a third of my money not doing a lot. Also as I'm not interested in the early retirement or taking the £100k tax free is it possible to just transfer all of it, must be a reason he didn't advise this as I would have thought he'd prefer to take on the whole amount. Also re-reading this draft if I'm already maxing out pension and ISA'a not sure where I could put that £100k anyway.  Life was so much simpler before I tried to understand my finances

Any clarity on this would, as always, be greatly appreciated.

What's really worrying is that you need to come here to ask, rather than your IFA providing you with adequate, clear information.  If you don't understand his recommendations now, I wonder what will happen further down the line? Go back and ask for clarification, not least the 'why' of his suggestions. If he doesn't convince you, then why would you do follow his advice?

Quorden

In fairness I didn't question him or ask the right questions around this part of his presentation, but I take your point and have already gone back and am waiting on a response. Just thought in the meantime to ask here if there was a specific reason around him not being able to manage the whole amount. Thanks.

Albermarle

what happens to the crystallised funds in the interim, my limited understanding is that they kind of gather dust for want of a better word 

You seem to have misunderstood this . Crystallised funds remain invested in the same way your uncrystallised pension is now . The only difference is that no more tax free cash can be taken from them in future , so any income or lump sum taken from them is potentially taxable .

Quorden

Ah, that makes more sense, thank you. I confess though I'm still not sure why the whole sum couldn't be managed by the IFA unless the protected benefits element of the fund prevent him from doing so. Hopefully will get an answer from him also.

dunstonh

If its in a section 32 buy out bond, EPP or hybrid plan then chaces are that there are only a handful of funds on that contract.    It's near impossible to manage a plan with a handful of funds.   So, typically, you just tell the person not to transfer it because of the valuable benefits (assuming they are valuable to you - it not then you transfer the lot and give up the benefits)