Transferring old workplace pension into a SIPP

Dale72

I have been trying for a little while to transfer an old workplace pension, into my existing SIPP. Because its more than £30,000 (about £68000), I need to take financial advice from an FCA registered IFA. This is where the problem is occurring, I can't seem to find one willing to do it. Either they are not taking on new clients at the moment, or not approving any SIPP transfers at the moment, or a host of other reasons. I would have thought for a fee of between 3 and 7 thousand, that I wouldn't have any trouble finding one. Has anyone else had problems with this, or have any advice on what I could do?

xylophone

You are seeking to transfer a deferred Defined Benefit pension to your SIPP?

https://www.moneymarketing.co.uk/analysis/will-more-db-networks-pull-up-the-drawbridge-on-transfers/

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

When is a pension transfer specialist required?

The FCA rules require that advice on pension transfers, conversions or opt outs (from a scheme with safeguarded benefits or potential safeguarded benefits). must be provided by, or checked by, a pension transfer specialist and firms wishing to provide advice on pension transfers and pension opt outs must apply for and obtain special permission to carry out that activity.

A PTS is not required where the safeguarded benefit involved is a guaranteed annuity rate.

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

However, although most schemes provide the right to transfer, not every scheme has to accept an incoming transfer.

A stakeholder pension scheme is currently the only type of scheme which must accept any transfer from another registered pension scheme.

Have you checked that your SIPP would accept a DB transfer even without a positive recommendation?

https://adviserbook.co.uk/

You could try the above- tick on "confirmed independent"  and "pension transfer" when the menu comes up.

Dale72

My SIPP provider needs a positive recommendation from an FCA registered IFA, that's the problem, I can't find one to do it.

xylophone

My SIPP provider needs a positive recommendation from an FCA registered IFA, that's the problem, 

From link above.

A stakeholder pension scheme is currently the only type of scheme which must accept any transfer from another registered pension scheme.

Anecdotally the AJ Bell SIPP  accepts DB transfers whether with or without positive or recommendation.

But you first need to find the PTS to take on your business and have his agreement that regardless of the advice given, he will confirm to the ceding scheme in the form they prescribe that you have obtained it. 

Marcon

Dale72 said:

My SIPP provider needs a positive recommendation from an FCA registered IFA, that's the problem, I can't find one to do it.

AJ Bell does indeed still accept transfers from DB schemes without a positive recommendation. Your other route is to transfer to a stakeholder pension which must accept any transfer from a UK registered pension scheme, and you can transfer on to any SIPP (it'll be a DC to DC transfer, so no issues - and stakeholders have no exit charges).

The adviser you use must confirm they have given you advice, whatever that advice is. It won't matter to the DB scheme, who only need to know you've received advice from a suitably authorised individual and will not want to see/know what the advice says.

Albermarle

Has anyone else had problems with this, or have any advice on what I could do?

If you search the forum you will see the same or similar question is asked several times a week, every week .

It is probably a bigger issue as your transfer value is not that big and therefore you will lose 5 to 10% in fees before you even start. Many give up and leave it where it is which ironically for most people is probably the best course of action anyway.

Dale72

Thanks xylophone and Marcon, I've contacted AJ Bell, who have confirmed they will accept the transfer irrespective of the advice I get. I've found an IFA who will give the advice for a reasonable (£2000) fee, and am on the way to turning this into something which could be a useful benefit in the future. Albermarle, what can I say? your slightly arrogant and patronising tone, while I'm sure unintentional, just goes to re-inforce the dislike and distrust that most people have for the financial services industry.

Dazed_and_C0nfused

and am on the way to turning this into something which could be a useful benefit in the future

It already was going to be a useful benefit in the future.

But the pension company currently with all the risk/liabilities will no doubt be as glad to offload you as you clearly are to accept the risk and costs of moving.

Dale72

But it wasn't (£27 a week at 67), hence my desire to transfer. I'm not just doing it for the sake of it D&C, a rather strange intervention, if you don't mind me saying so.

Albermarle

 just goes to re-inforce the dislike and distrust that most people have for the financial services industry.

I do not work in the financial services industry and never have done .

If it really is only £27 per week and you have been offered £68K it seems a very generous offer. Normally something around £50K would be expected. Are you sure the £27 or £1400 pa is not the figure you were given when you left that employer ? As between then and now it will have been uprated with inflation every year .

I might be barking up the wrong tree but it is a common mistake .

dunstonh

Albermarle, what can I say? your slightly arrogant and patronising tone, while I'm sure unintentional, just goes to re-inforce the dislike and distrust that most people have for the financial services industry.

Why would a forum post from a member of the public have anything to do with trust in the financial services industry?

I've found an IFA who will give the advice for a reasonable (£2000) fee, 

That is very low. Indeed, too low in my opinion but it's their own fault. Not yours.  So, you may as well take them up on it.