Gaining control over my pension

fizzykoi

Hi michael1234, I have the exact same problem. I know enough about pensions to know that I want to transfer the DC part of my pension to flexible drawdown, within a SIPP that I can manage easily. I don't want to pay £1000s to achieve that as it might negate any benefit of transferring. Did you come across any useful source of advice that summarises what you've learned...or do I have to read the whole thread?

Malthusian

Marcon said:

Ellierose said:

I used abridged process to transfer DB to stakeholder work pension. Cost £275 only and was straight forward no decision and stakeholder accepted transfer. £275 for a £267k transfer compared to 3%

A DB scheme is only allowed to release funds if you have received full advice, so I don't think anyone else should see this as a viable option. 

See https://www.handbook.fca.org.uk/handbook/COBS/19/1A.html

Yes, something's fishy here. Thanks to having a stakeholder pension open, Ellierose should have been able to transfer as an "insistent client" fairly easily, unlike the vast majority. But as you say, to transfer as an insistent client you still need full advice, not abridged, and it's difficult to see how that could have been legitimately provided for £275.

fizzykoi said:

Hi michael1234, I have the exact same problem. I know enough about pensions to know that I want to transfer the DC part of my pension to flexible drawdown, within a SIPP that I can manage easily. I don't want to pay £1000s to achieve that as it might negate any benefit of transferring. Did you come across any useful source of advice that summarises what you've learned...or do I have to read the whole thread?

When someone has a workplace pension with DB and DC elements it is normally possible to transfer the DC one and leave the DB element where it is. Have you checked with the scheme whether it would be possible?

It may be a bad idea even if it is possible - some of these arrangements allow tax free cash in respect of both elements to be taken from the DC fund only. Effectively this gives you the right to take more than the standard 25% as tax free cash, without needing to reduce the DB pension. This right can be lost if you transfer out of the DC pension without taking benefits from the DB one simultaneously.

Sportfire

It will obviously cost thousands due you wanting to do a very high risk transaction.   If you are concerned about it costing thousands then perhaps having a risk based pension is not a good idea.    In the last few months, people have seen losses that run into tens of thousands or hundreds of thousands.    So, if you are baulking at a relatively low amount, just wait until you see the scale of losses that WILL occur from time to time.

I am not connected with this person and neither offer any  advice. But these are very wise words,  read and read again,. Save it on your desk top and When the next lows come round and the swings are  -£50k, it will act as a reminder that  you  need an adviser who can  talk you through what you should or not do next.

Ellierose

I’ve transferred without full advice so not sure why people saying you can’t. If DB scheme are happy to release with abridged and stake holder pension happy to receive then I’ve just saved myself £8k in advice fees. Funds already en route free of charge from my stakeholder to vanguard ETF’s with lower fees than my work pension 

Albermarle

Ellierose said:

I’ve transferred without full advice so not sure why people saying you can’t. If DB scheme are happy to release with abridged and stake holder pension happy to receive then I’ve just saved myself £8k in advice fees. Funds already en route free of charge from my stakeholder to vanguard ETF’s with lower fees than my work pension 

Abridged advice is not enough .
I suspect that the DB pension administrators have accepted abridged advice by mistake . Many staff in this area are poorly trained /inexperienced, whilst on the other side pension issues can be complicated .

dunstonh

Ellierose said:

I’ve transferred without full advice so not sure why people saying you can’t. If DB scheme are happy to release with abridged and stake holder pension happy to receive then I’ve just saved myself £8k in advice fees. Funds already en route free of charge from my stakeholder to vanguard ETF’s with lower fees than my work pension 

You shouldn't be able to as it is a breach of the legal requirement.  If you have, then someone has messed up.

xylophone

You shouldn't be able to as it is a breach of the legal requirement.  If you have, then someone has messed up.

Indeed.

https://www.thepensionsregulator.gov.uk/en/document-library/scheme-management-detailed-guidance/administration-detailed-guidance/dealing-with-transfer-requests

fizzykoi

fizzykoi said:

Hi michael1234, I have the exact same problem. I know enough about pensions to know that I want to transfer the DC part of my pension to flexible drawdown, within a SIPP that I can manage easily. I don't want to pay £1000s to achieve that as it might negate any benefit of transferring. Did you come across any useful source of advice that summarises what you've learned...or do I have to read the whole thread?

When someone has a workplace pension with DB and DC elements it is normally possible to transfer the DC one and leave the DB element where it is. Have you checked with the scheme whether it would be possible?

It may be a bad idea even if it is possible - some of these arrangements allow tax free cash in respect of both elements to be taken from the DC fund only. Effectively this gives you the right to take more than the standard 25% as tax free cash, without needing to reduce the DB pension. This right can be lost if you transfer out of the DC pension without taking benefits from the DB one simultaneously.

Thanks Malthusian. I checked with my provider and they confirm that the two can be treated completely independently - the DB part has to remain with them, but I can transfer the DC part out, if I want. There doesn't appear to be any additional tax free benefit.

sandsy

Albermarle said:

Ellierose said:

I’ve transferred without full advice so not sure why people saying you can’t. If DB scheme are happy to release with abridged and stake holder pension happy to receive then I’ve just saved myself £8k in advice fees. Funds already en route free of charge from my stakeholder to vanguard ETF’s with lower fees than my work pension 

Abridged advice is not enough .
I suspect that the DB pension administrators have accepted abridged advice by mistake . Many staff in this area are poorly trained /inexperienced, whilst on the other side pension issues can be complicated .

And the advice firm who signed the advice confirmation is in breach of FCA rules:

A firm must not provide a confirmation for the purposes of section 48 of the Pension Schemes Act 2015 unless it has provided full pension transfer or conversion advice. (COBS 19.1A.5R)

Malthusian

Ellierose said:

I’ve transferred without full advice so not sure why people saying you can’t.

Kerching. You've just won a risk-free bet on the markets.

If markets go down or even sideways for a few years, you can submit a complaint that you shouldn't have been allowed to do it, and either the DB scheme or the adviser (depending on whether the adviser mistakenly provided the confirmation or whether the DB scheme mistakenly proceeded without it) will have to bung a lump sum into the pension to "put you back where you should be", based on a calculation of how much the DB scheme would have been worth.

Welcome to "managing your own risks".

If DB scheme are happy to release with abridged and stake holder pension happy to receive then I’ve just saved myself £8k in advice fees.

Others already said that DB schemes are legally not allowed to do that. As for the stakeholder, they are legally required to accept the transfer whether they're happy or not.