Unable to transfer my DB pension - can anyone help?

random129

I have not asked about an early pension yet as by far the best option for me is to transfer and take 25% of the pot tax free immediately but may pursue an early pension as a last resort.

The cash lump sum if I wait until my normal retirement date works out at approximately 6% of the current transfer value. I don't want to have to settle for 6% if I can get 25% if I manage to transfer. The law needs changing. As it stands it seems impossible for someone to exercise their legal right to transfer under the 2015 ACT.

All that needs to happen is anyone who goes against the advice of an IFA and becomes an insistent client must then be barred from taking action if it all goes wrong (after all common sense dictates they should not be allowed to sue someone for NOT taking their advice) and the IFA must be duty bound to complete the transfer. 

Dale72

random129 said:

I have not asked about an early pension yet as by far the best option for me is to transfer and take 25% of the pot tax free immediately but may pursue an early pension as a last resort.

The cash lump sum if I wait until my normal retirement date works out at approximately 6% of the current transfer value. I don't want to have to settle for 6% if I can get 25% if I manage to transfer. The law needs changing. As it stands it seems impossible for someone to exercise their legal right to transfer under the 2015 ACT.

All that needs to happen is anyone who goes against the advice of an IFA and becomes an insistent client must then be barred from taking action if it all goes wrong (after all common sense dictates they should not be allowed to sue someone for NOT taking their advice) and the IFA must be duty bound to complete the transfer. 

While I sympathise with your predicament and agree with a lot of what you've said, an insistent client shouldn't be barred from taking action, because as numerous cases have shown, bad advice has been given, and just because a client has been insistent that doesn't preclude the possibility that if the advice had been better, then the client may have followed it.

sandsy

random129 said:

They didn't give me anything in writing apart from an Appropriate Advice Declaration form. That did not state their reasons for advising me not to transfer.

They have to give you something in writing, under FCA rules. Go back to the adviser and ask them to send you the suitability report they should have given you before they gave you the advice declaration form. If they don't, make a formal complaint to them, then if they don't respond satisfactorily within 8 weeks, you can complain to FOS.

Also you've said you would immediately access the lump sum if you could transfer but you can't afford advice. Can you genuinely not afford advice or do you have savings you could use but don't want to? 

random129

sandsy said:

random129 said:

They didn't give me anything in writing apart from an Appropriate Advice Declaration form. That did not state their reasons for advising me not to transfer.

They have to give you something in writing, under FCA rules. Go back to the adviser and ask them to send you the suitability report they should have given you before they gave you the advice declaration form. If they don't, make a formal complaint to them, then if they don't respond satisfactorily within 8 weeks, you can complain to FOS.

Also you've said you would immediately access the lump sum if you could transfer but you can't afford advice. Can you genuinely not afford advice or do you have savings you could use but don't want to? 

Thanks for that. I hadn't thought of complaining about the IFA. I will look into it.

I genuinely cannot afford to pay for the advice unless I can pay for it out of my pension when it is transferred. So if I am advised to not transfer then I will have no way of paying unless I sold my house.

random129

But I must say even if I had the money I wouldn't pay for advice unless there was a guarantee I could transfer. I actually don't want advice. I know what I want to do. I fully understand all the risks but it is what I want to do. I only took advice last year because the law states I must. Why would anyone pay £5,000 for advice if they are not guaranteed anything in return? That said at this stage I would gladly pay an IFA double their fees if they guaranteed to transfer my funds whether I followed their advice or not.

Albermarle

The cash lump sum if I wait until my normal retirement date works out at approximately 6% of the current transfer value. I don't want to have to settle for 6% if I can get 25% if I manage to transfer. 

Although you would expect that 25% of the CETV  would be more than the lump sum that the DB pension would offer , you would not normally expect such a big difference.

For example in my own case it would equate to around 15% of the last CETV offered ( although I had no interest to give up the DB scheme )

You may find that there is an option to take a larger lump sum from the DB scheme with a consequent reduction in the annual pension.

sandsy

random129 said:

But I must say even if I had the money I wouldn't pay for advice unless there was a guarantee I could transfer. I actually don't want advice. I know what I want to do. I fully understand all the risks but it is what I want to do. I only took advice last year because the law states I must. Why would anyone pay £5,000 for advice if they are not guaranteed anything in return? That said at this stage I would gladly pay an IFA double their fees if they guaranteed to transfer my funds whether I followed their advice or not.

No reputable advice firm will give you a guarantee you could transfer before they've gone through the proper processes. And similarly, no reputable advice firm will double their fees to give you that guarantee. Both of those things would put them in breach of FCA regulation.

People should take advice because they want to know what's best for them, whether that's a transfer or not. For many people, finding out that they can achieve what they want without giving up a DB pension is a huge relief. However, far too many advisers don't seem to look at how to make that work and just focus on how it can work if a transfer goes ahead - hence the clampdown on how advice firms must charge for advice. 

How significant are your debts? Can you pay them back over time without transferring? Have you taken debt counselling? I'm wondering if you are one of the few who might be eligible to be charged on a contingent basis if you are genuinely in dire financial straits (if you spoke to an adviser, you would say to them that you're wondering if you might be eligible for the carve-out).

random129

sandsy said:

No reputable advice firm will give you a guarantee you could transfer before they've gone through the proper processes. And similarly, no reputable advice firm will double their fees to give you that guarantee. Both of those things would put them in breach of FCA regulation.sandsy said:

And it is for that reason I am actively looking for a disreputable firm. As risky as that is it seems the only way I will be able to exercise my legal right to transfer. The law needs changing so, after taking advice, people can transfer against that advice if they so choose. After taking advice, they will be making an informed decision so isn't that what the law intended? Not to block transfers from everyone unless an IFA says it's ok.

sandsy said:

People should take advice because they want to know what's best for them, whether that's a transfer or not. For many people, finding out that they can achieve what they want without giving up a DB pension is a huge relief. However, far too many advisers don't seem to look at how to make that work and just focus on how it can work if a transfer goes ahead - hence the clampdown on how advice firms must charge for advice. 

Maybe for some people but an average person cannot afford 5 grand for advice. It's ridiculous. It is impossible for me to achieve what I want without transferring. 100% impossible. To charge me £5,000 to simply be told "sorry I can't advise you to transfer and I won't help you to transfer even into an ultra safe very low risk fund either. So just pay me £5,000 and I'll be on my way to my bank now. Thank you very much". Makes Arthur Daley's scams seem like legit business.

sandsy said:

How significant are your debts? Can you pay them back over time without transferring? Have you taken debt counselling? I'm wondering if you are one of the few who might be eligible to be charged on a contingent basis if you are genuinely in dire financial straits (if you spoke to an adviser, you would say to them that you're wondering if you might be eligible for the carve-out).

My debts are significant but because I am in a debt management plan with no interest payable I don't qualify on a contingent basis. The money I would save if my debts were paid would make a massive difference to my life now. That's what is important to me not that my transferred funds might possibly run out in 15 years time. In all likelihood I will either be dead or in a care home by then.

dunstonh

After taking advice, they will be making an informed decision so isn't that what the law intended? Not to block transfers from everyone unless an IFA says it's ok.

The blockage has nothing to do with IFAs.  It is to do with providers.

And it is for that reason I am actively looking for a disreputable firm. As risky as that is it seems the only way I will be able to exercise my legal right to transfer. The law needs changing so, after taking advice, people can transfer against that advice if they so choose.

The law already allows that.  It is not the law that is blocking it.

random129

dunstonh said:

After taking advice, they will be making an informed decision so isn't that what the law intended? Not to block transfers from everyone unless an IFA says it's ok.

The blockage has nothing to do with IFAs.  It is to do with providers.

And it is for that reason I am actively looking for a disreputable firm. As risky as that is it seems the only way I will be able to exercise my legal right to transfer. The law needs changing so, after taking advice, people can transfer against that advice if they so choose.

The law already allows that.  It is not the law that is blocking it.

Then maybe the law needs to be changed to force providers to accept transferred funds from everyone who has taken advice. Arbitrarily blocking people transferring funds in accordance with the law is simply not right and should not be allowed.