Pension transfer

John357

Hello

My existing pension provider does not allow 25% tax free withdrawal and as I need this money I need to transfer to another provider who does. I have found another, but they say the rules are that for pension funds over £30k then I shall need an IFA to show that they have advised me. The problem is that every (local) IFA I have approached either cannot advise due to the size of the fund, or they will only advise if I agree to them charging for the value of the fund. All I want is a simple statement "I have discussed the issue with the person and can confirm I have given advice". I am quite happy to pay for this, but not as a % of the fund value. Has anyone else been in this situation and can you let me know if you have found a suitable IFA.

Thank you in advance

Aegis

Sadly I don't have great news for you.  The world of pensions in fraught with regulations designed to protect people from themselves.  In practice, this means that barriers are placed between policyholders and any decisions involving safeguarded rights over £30k of value.

The fact that you mention that the provider has said that you need to have taken advice strongly implies that you have such safeguarded rights.  Often this means that it's a final salary pension or a section 32 policy, both of which have really valuable benefits that advisers certainly shouldn't be blasé about providing vague advice on.

It is possible that you will find an adviser who is willing to draft you a letter saying "I recommend you do nothing" for a nominal fee, and you could in theory use that to say to a proposed receiving scheme that you had taken advice, but I suspect that few advisers are willing to risk the wrath of the FCA or FOS by giving any advice that isn't based on a full analysis of your circumstances.

Hope this is helpful to contextualise the issue even if it isn't an actual solution.

John357

Thank you for your advice. Prior to retiring, I was a chartered accountant and also an IFA (with the old regulatory authority of FSA) so I am not entirely naive regarding the issue. I think I will need to go back to the IFA and see if they will agree to such without the requirement of a % fee.

soulsaver

You may get more input on the pensions board: Pensions, annuities & retirement planning — MoneySavingExpert Forum

p00hsticks

It's unclear if you are talking about a DB pension or a DC one with some form of protected rights that requires you to seek advice?

FYI, there is a forum board specifically relating to Pensions queries where this topic has come up repeatedly, so it may be worth looking there to see previous threads on the subject.

https://forums.moneysavingexpert.com/categories/pensions-annuities-retirement-planning

However I believe the general consensus there now is that there are relatively few IFAs prepared to take on this work due to the increased liability insurance, those that do will usually charge as a percentage of the CETV fund and few (no?) providers are now willing to accept a transfer in from an 'insistent client' if the advice given as a result of the consulation is not to transfer.

Band7

John357 said:

Thank you for your advice. Prior to retiring, I was a chartered accountant and also an IFA (with the old regulatory authority of FSA) so I am not entirely naive regarding the issue. I think I will need to go back to the IFA and see if they will agree to such without the requirement of a % fee.

Why should an IFA spend time understanding your situation without charging you a commensurate fee for their professional advice? Why should they take the risk of confirming in writing that they have given you advice, without first understanding your situation?

John357

I was not saying that I do not want unpaid advice. As I said I am quite happy to pay for such advice.

John357

p00hsticks said:

It's unclear if you are talking about a DB pension or a DC one with some form of protected rights that requires you to seek advice?

FYI, there is a forum board specifically relating to Pensions queries where this topic has come up repeatedly, so it may be worth looking there to see previous threads on the subject.

https://forums.moneysavingexpert.com/categories/pensions-annuities-retirement-planning

However I believe the general consensus there now is that there are relatively few IFAs prepared to take on this work due to the increased liability insurance, those that do will usually charge as a percentage of the CETV fund and few (no?) providers are now willing to accept a transfer in from an 'insistent client' if the advice given as a result of the consulation is not to transfer.

It id an old Retirement Annuity. Maybe I had worded the original post indelicately. However, I will go back to the IFA and ask within what parameters they operate.

John357

And I did not mean regulatory parameters, these are set externally, I meant internally.

dunstonh

I was a chartered accountant and also an IFA (with the old regulatory authority of FSA) so I am not entirely naive regarding the issue

In which case, you would know that what you want is a very high risk transaction.   And risk and liability come at a cost. 

And the cost of that liability increases with the fund value.    And, if it is a GAR override,  the PI insurers will be charging that IFA firm for the rest of its existence for doing that transaction.  Usually, it is a transaction that costs in the many thousands, irrespective of whatever method you you calculate it.

What is the safeguarded benefit?

It id an old Retirement Annuity. Maybe I had worded the original post indelicately. However, I will go back to the IFA and ask within what parameters they operate.

You are not in a strong position.    Many IFAs will tell you that they are not interested if they see a hint of trouble on such a high risk transaction with ongoing cost.

 All I want is a simple statement "I have discussed the issue with the person and can confirm I have given advice". 

The ceding scheme will usually have its own form and declaration that the IFA has to fill in and accept the liability for.

xylophone

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/how-retirement-annuity-contracts-work

Do you mean that you have an old S226 pension as above?

Does it have a Guaranteed Annuity Rate?

Is this why financial advice is required?

See p4 here

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf