Woodford return of capital transactions - puzzled? 2 December 2022 at 6:17PM in Savings & investments 4 replies 324 views

Aged

I heard on the grapevine that another payout was made recently, but I received no letters or messages about it. On examining my retirement account on the pension provider's website, I can see two transactions described as 'return of capital' which practically cancel each other out. There is also a purchase pending (which was not authorised by me) to buy units in one of the other funds that I currently hold. Is this common practice? I expected the cash to be simply credited back to my account. There is no option that I can see to approve or clear this pending transaction - it's just sitting there in limbo.

ColdIron

It's a Return of Capital Corporate Action with no option for you to elect so no letter required (although you should probably get a notification pointing you at the CA in your documents)

Many pensions have no facility to hold cash so it would be reinvested. There may also be a Standing Order to automatically reinvest cash. It is very unlikely that it would be paid out to your bank account as you may be too young, may cause you tax problems etc

This is the 5th return of capital so I would have thought you would have seen this 4 times in the past

Aged

ColdIron said:

It's a Return of Capital Corporate Action with no option for you to elect so no letter required (although you should probably get a notification pointing you at the CA in your documents)

Many pensions have no facility to hold cash so it would be reinvested. There may also be a Standing Order to automatically reinvest cash. It is very unlikely that it would be paid out to your bank account as you may be too young, may cause you tax problems etc

This is the 5th return of capital so I would have thought you would have seen this 4 times in the past

I didn't go into as much detail in the past as I do now, so I probably wouldn't have noticed. I now keep a model of my portfolio on one of the online tools, and I reconcile them often to make sure they keep in step. I do remember getting letters with previous returns but as I said, nothing this time. I didn't expect it to go back into my bank account, just that it would be returned as cash within my pension account. Always learning!

Albermarle

It probably depends on the type of pension. The typical workplace pension does not have a cash account as such. There maybe one just to handle the fees, but not for larger amounts.

Aged

Albermarle said:

It probably depends on the type of pension. The typical workplace pension does not have a cash account as such. There maybe one just to handle the fees, but not for larger amounts.

It's not a workplace pension, it's a Quilter Collective Retirement Account which I am now managing myself. Cash is able to be held in the account, and a small amount of interest is payable on it.