Transferring a small pot without advice

AllisonMG

I have a small defined benefit pension pot worth under £10k which I would like to transfer in to my main pension. Despite the small amount involved (which is also well under the £30K limit above which financial advise is legally required) my pension company won't transfer it in without financial advice and my financial advisers won't give me advice without charging a disproportionate amount. Does anyone know of a pension company which will accept a small pot without financial advice? Many thanks

dunstonh

The law is based on transferring out.  A trivial CETV means advice is not required.   However, many receiving schemes default on accepting DB pensions irrespective of the amount unless there is advice.  That isn't a universal position, but it is a common one as a) it is statistically likely to be unsuitable and b) those doing it may just be using the receiving scheme to try and get the money paid as a lump sum. So unprofitable to them.

If you have an existing stakeholder pension, they are required to accept to it under stakeholder rules.    However, for other types< I will let others answer as I don't know.

AllisonMG

Thanks for that. I have an existing defined contribution pension - I assume that's the same as a stakeholder pension? If they are required to accept it under stakeholder rules, can you tell me where I can find those please? 

Mothman

Stakeholder pensions are a low cost type of defined contribution scheme but they have largely been superseded by auto-enrolment schemes. If you have a stakeholder scheme I would have thought this would be stated in the pension name.

Albermarle

It is probably worth saying who you have your current DC scheme with ( who will not accept the transfer)
I think Fidelity is another one that will not accept any DB transfers without financial advice.

dunstonh

 I have an existing defined contribution pension - I assume that's the same as a stakeholder pension?

A stakeholder is a type of DC scheme.  But so is a SIPP or  PPP or S32 buy out bond or S226 retirement annuity contract, COMP/CIMP, master trust scheme and more.

If they are required to accept it under stakeholder rules, can you tell me where I can find those please? 

The stakeholder pension rules only apply to stakeholder pensions.  Not other types of DC pensions.  And you would need an existing one as there are none currently retailed direct to consumers.  The few that still offer them only do so via intermediaries and the intermediaries will refuse to do DB transfer.   

Your plan details and annual statement will specify whether it is a stakeholder pension as that is the name of the product.  Much in the same way as a plan that is a PPP will say it is xxxx personal pension.

xylophone

Are you  of an age to be able to access the pension from the DB scheme itself as a small pot?

https://www.mandg.com/pru/adviser/en-gb/insights-events/insights-library/small-pots-defined-benefit-trivial-commutations#:~:text=A small pot payment (properly,(personal pension plans etc.)

You would take a 25% tax free lump sum with the rest taxable as income.

Perhaps you could regard this as an income replacement for the year and increase contributions to your existing scheme from your salary?

xylophone

https://www.ajbell.co.uk/faq/do-you-accept-final-salary-transfers

Do you accept final salary pension transfers?

Yes, we do. As final salary or 'defined benefit' pensions pay a guaranteed income, you may want to seek financial advice first to check whether transferring it is right for you.

To transfer a final salary pension scheme, or a scheme that includes safeguarded benefits (see below) worth at least £30,000, a suitably qualified financial adviser must recommend that the transfer is in your interests. To confirm you’ve received their recommendation, you and your adviser will need to complete our financial advice declaration form.

They say nothing about any advice requirement for a DB pension transfer worth under £10,000......

You could give AJ Bell a ring?

AllisonMG

Thanks everyone. The small db pot is a local government scheme - Hampshire. My main dc pot is with Embark. Neither are stakeholder pensions. I'm currently waiting for Embark to reconsider their refusal to transfer in without advice but am not holding out much hope. From everything I've found out up to now most pension companies won't accept transfer of a db system without advice irrespective of the size of the pot so it's probably just a case of ringing around to see who will. I'll start with AJ Bell.

LHW99

AllisonMG said:

Thanks everyone. The small db pot is a local government scheme - Hampshire. My main dc pot is with Embark. Neither are stakeholder pensions. I'm currently waiting for Embark to reconsider their refusal to transfer in without advice but am not holding out much hope. From everything I've found out up to now most pension companies won't accept transfer of a db system without advice irrespective of the size of the pot so it's probably just a case of ringing around to see who will. I'll start with AJ Bell.

IMy understanding is that a local government scheme will be an unfunded DB and not transferable under any circumstances. This may be the issue.

Marcon

LHW99 said:

AllisonMG said:

Thanks everyone. The small db pot is a local government scheme - Hampshire. My main dc pot is with Embark. Neither are stakeholder pensions. I'm currently waiting for Embark to reconsider their refusal to transfer in without advice but am not holding out much hope. From everything I've found out up to now most pension companies won't accept transfer of a db system without advice irrespective of the size of the pot so it's probably just a case of ringing around to see who will. I'll start with AJ Bell.

IMy understanding is that a local government scheme will be an unfunded DB and not transferable under any circumstances. This may be the issue.

No - LGPS is a funded scheme, so a transfer certainly is possible.

Transfers out of unfunded public sector schemes are also possible, but only to another DB arrangement.