Some more pension advice please?

Nelson1100

So after some useful help and advice from forum members I decided to try and take some financial advice. 

I found a couple of local advisors but they said they were a bit too busy to take me on but one did kindly spend half an hour going through my options free of charge.

I'm close to retiring with a reasonable amount of savings I have 2 pensions, one with Zurich containing £41k and a workplace one with Legal and general with about £30k in and he suggested I should put the Zurich one in the L&G one and start paying all my wages into that as well and living off my savings.

Simple I thought.

No!

My company payroll have been giving me the run around all day transferring me from one useless individual to another without success but but the icing on the cake is that I've also been on to Zurich's helpline and L&Gs "virtual assistant" and they're an absolute nightmare.

So Zurich are saying I can't transfer anything over £30k of my money (and it is my money after all) unless I use a financial advisor. The 2 FAs I spoke to yesterday said they would charge about £2k if they were in a position to take me on but that's .  I then said ok I'll just transfer 2 X £2.5k Thanu you very much.  The man from Zurich reckons he could do that but they would have to keep £5k of my money! I said I couldn't believe it and he said that it was in the small print. 

This is why I never trust institutions like banks and pension companies they're just robbing you every chance they get! They're perfectly happy to transfer my money if I pay a stranger with some letters after his name £2k to look at a spreadsheet but if I don't they're saying they'll keep back £5k of my money?

Surely this isn't right?

Nelson1100

Just spoken to another financial advisor who has offered to transfer the £41k for 4.5% so basically £1845 for him to tell Zurich its ok for them to transfer the £11k left in my pension into my workplace pension? 

This is disgusting!

tacpot12

I would assume that Zurich are requiring you have pension transfer advice because the money you have with them has more than £30,000 of protected rights (e.g. there is at least £30,000 that has a guaranteed annuity rate associated with it). You should have a statement from them that shows the value of the protected rights that you have. If this is below £30,000 (and assuming you investment with them haven't risen), then you should not need to take advice to transfer the money to another registered pension scheme.

However, you still should consider paying for the advice about moving money out of this pension in case the protected rights are especially valuable. Zurich may also be entitled to take an exit charge from any transfer. The IFA that advises you would look at all the pros and cons of transfering the pension from Zurich.

It isn't clear from your post why you asked to transfer 2x £2.5k? Was this a withdrawal request you werre making? Was the £5k that they were going to withhold a charge (and if so, for what), or was it the emergency tax that you would need to pay on a withdrawal?  (TIP: If someone says "it's in the smallprint", ask them to send you a copy of the small print with the relevent section highlighted.)

Your distrust of banks and pension companies is well-founded, but you need them, so you have to learn how to make them work for you. This means understanding the charging structure of any product you buy. If you don't understand every aspect of how it makes money for the institution, you run the risk of making decisions that you agreed they could charge you for.  

Pat38493

Nelson1100 said:

So after some useful help and advice from forum members I decided to try and take some financial advice. 

I found a couple of local advisors but they said they were a bit too busy to take me on but one did kindly spend half an hour going through my options free of charge.

I'm close to retiring with a reasonable amount of savings I have 2 pensions, one with Zurich containing £41k and a workplace one with Legal and general with about £30k in and he suggested I should put the Zurich one in the L&G one and start paying all my wages into that as well and living off my savings.

Simple I thought.

No!

My company payroll have been giving me the run around all day transferring me from one useless individual to another without success but but the icing on the cake is that I've also been on to Zurich's helpline and L&Gs "virtual assistant" and they're an absolute nightmare.

So Zurich are saying I can't transfer anything over £30k of my money (and it is my money after all) unless I use a financial advisor. The 2 FAs I spoke to yesterday said they would charge about £2k if they were in a position to take me on but that's .  I then said ok I'll just transfer 2 X £2.5k Thanu you very much.  The man from Zurich reckons he could do that but they would have to keep £5k of my money! I said I couldn't believe it and he said that it was in the small print. 

This is why I never trust institutions like banks and pension companies they're just robbing you every chance they get! They're perfectly happy to transfer my money if I pay a stranger with some letters after his name £2k to look at a spreadsheet but if I don't they're saying they'll keep back £5k of my money?

Surely this isn't right?

Welcome to the world of pensions - things seem to be slow and cumbersome.

Probably I should mention that we cannot offer "advice" as such - advice is a bit of a loaded word in the pension world - I am just a random poster on the internet but I can try to say what I might do if I was in the situation described.

Two separate things as you don't need to transfer the Zurich pension into the other one to start paying in your full salary so I can take it one by one:

Salary - As discussed on your other thread - you need to calculate what portion of your wages you can pay into the pension without breaching the limit.  Based on the last thread I am going out on a limb and assume that you haven't paid anything close to £40K into your pension in any of the last years.  This means you have plenty of rollover allowance available.

However you also are limited to paying in your total wages amount including any employer contributions and tax relief that was added.  This means at the least that you need to pay in your full salary minus any employer contributions in that tax year.  If you post the exact full wages you expect to earn this tax year (up to April 6th 2023) and next tax year, and the % that your employer pays in, someone here could help to validate what you could contribute.  

So if your salary is £52K and your employer paid in £5K as employer contributions, you can pay in £47K (including any tax relief on that but if it's going through your PAYE system it's probably going before tax anyway).

Also - if you want to take it to the limit, you can also pay in a back payment out of your cash to top up your pension contributions to the £47K in the above example - so you could directly pay £30K or whatever of your cash into the pension as long as you don't exceed the above limit.  Then at 6th April eveyrthing rolls over and you can do up to the same again next tax year.

So basically you would need to ask your employer two points
1) You want to increase your pension % to a very high number like 95% or whatever it comes out to based on the above.
2) If you want to maximise the benefit this tax year, you want to make a large one off contribution to the pension scheme from your own money and how do you do that?

Also you need to be comfortable with the fund that your employer pension is currently invested in - per the other thread it's currently invested in a fund that all or mainly in UK bonds/gilts if I remember correct.  This means it should be less volatile than equity shares, but it is not zero risk and is not the same as cash (but as said before, remember that in many pensions you can actually tell them to just keep the money in cash inside the pension if you really want to, although most people would not do that).

Zurich pension - for this you would need to post some more details about your Zurich pension - what is the exact name of the pension and when was it taken out?  Maybe paste in some details about what it is.  The comment that you can only transfer £30K without advice seems strange to me - normally this would only apply to a defined benefit scheme as far as I know, but if it was a DB scheme, they would not be saying you can transfer out two £25K portions. 

The only other thing could be if the Zurich scheme has something called "safeguarded benefits" - for example death benefits or suchlike or guarantees of minimum returns or something - that might trigger a need for advice to transfer out.

Likewise, I have no idea what they mean by you must leave 5K in there - if it's an exit fee that they are charging you for transferring out, this could be the case - again would need more details about exactly what they are saying to comment further.  Some schemes (mainly older ones but even some today) charge you an exit fee (penalty if you like) for transferring your money out - most don't these days from what I have read here.

However I didn't read an example where a scheme had a rule that says you are not allowed to transfer out at all and you have to leave 5K in the fund - need more info to understand what they are on about.

Marcon

Nelson1100 said:

So after some useful help and advice from forum members I decided to try and take some financial advice. 

I found a couple of local advisors but they said they were a bit too busy to take me on but one did kindly spend half an hour going through my options free of charge.

I'm close to retiring with a reasonable amount of savings I have 2 pensions, one with Zurich containing £41k and a workplace one with Legal and general with about £30k in and he suggested I should put the Zurich one in the L&G one and start paying all my wages into that as well and living off my savings.

Simple I thought.

No!

My company payroll have been giving me the run around all day transferring me from one useless individual to another without success but but the icing on the cake is that I've also been on to Zurich's helpline and L&Gs "virtual assistant" and they're an absolute nightmare.

So Zurich are saying I can't transfer anything over £30k of my money (and it is my money after all) unless I use a financial advisor. The 2 FAs I spoke to yesterday said they would charge about £2k if they were in a position to take me on but that's .  I then said ok I'll just transfer 2 X £2.5k Thanu you very much.  The man from Zurich reckons he could do that but they would have to keep £5k of my money! I said I couldn't believe it and he said that it was in the small print. 

This is why I never trust institutions like banks and pension companies they're just robbing you every chance they get! They're perfectly happy to transfer my money if I pay a stranger with some letters after his name £2k to look at a spreadsheet but if I don't they're saying they'll keep back £5k of my money?

Surely this isn't right?

There's certainly some confusion somewhere. Rather than posting here and getting some well-intentioned but mixed responses (judging by your previous lengthy thread), why not have a chat with https://www.moneyhelper.org.uk/en/pensions-and-retirement for free, impartial and expert information? They could offer you a free appointment with PensionWise to talk through your options: https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise 

Often having a grasp of matters, plus a better understanding of the arcane world of pensions, will put you in a good  position to decide what you want to do, whether that's taking your own decisions or seeking proper advice from an IFA. There are occasions where the law requires you to take advice, but at least you can choose whether or not it is likely to be worth going down that path.

Nelson1100

tacpot12 said:

It isn't clear from your post why you asked to transfer 2x £2.5k? 

Sorry that was a typo, it should have read 2 x £20.5k, the reason being if I can't have more than £30k then I'll take the £41k in 2 seperate amounts. Should have read it back before I posted but I'm so bloody angry. 

plumb1_2

I don’t think you’ll be able to transfer any of it, without taking advice if it’s got safeguarded benefits.

Pat38493

plumb1_2 said:

I don’t think you’ll be able to transfer any of it, without taking advice if it’s got safeguarded benefits.

This is the strange part - if it has safeguarded benefits they would not be saying that he can transfer it in two chunks - it would all require advice.

As said need more info on the exact details of that pension.

Keep in mind that you have the whole year to sort this out if you are not bothered about topping up this tax year to April '23 into your pension (even then you have a couple of months).

Also if I was you, the Zurich pension is not really the priority compared to the other part.  The Zurich pension already sat there for many years so it's not going to matter if it takes a few more months to get it sorted.  If it was me, the more important point is the point about paying as much of your salary as possible into your pension before you stop working, which is the advice that IFA gave you but also the same that several posters proposed on your other thread.

Also Marcon's suggestion is a very good one - book a free appointment with PensionWise.  I have heard they are very good and everyone has the right to a free appointment with them.

dunstonh

Nelson1100 said:

Just spoken to another financial advisor who has offered to transfer the £41k for 4.5% so basically £1845 for him to tell Zurich its ok for them to transfer the £11k left in my pension into my workplace pension? 

This is disgusting!

It seems quite reasonable considering the risk to the adviser, if there are safeguarded benefits (the only reason you need an adviser if the value is over £30k).  Some of us would be cheaper than that but it is a busy time at the moment.

What are the safeguarded benefits that require you to have advice?     Some safeguarded benefits are riskier to override than others.  And some require a pension transfer specialist and there are fewer of those around.

This is the strange part - if it has safeguarded benefits they would not be saying that he can transfer it in two chunks - it would all require advice.

I suspect its more likely misunderstanding of information (either given to the AI or understanding what the AI has said).
  It is unclear from the post if the only info from the providers is AI and not human.

plumb1_2

Pat38493 said:

plumb1_2 said:

I don’t think you’ll be able to transfer any of it, without taking advice if it’s got safeguarded benefits.

This is the strange part - if it has safeguarded benefits they would not be saying that he can transfer it in two chunks - it would all require advice.

As said need more info on the exact details of that pension.

Think the OP said he’ll withdraw 2x £20.5k

Ive got the same problem with a old SL dc pot of £34k, ( safeguarded) tried a couple of ifa and no joy. Very frustrating.

xylophone

https://forums.moneysavingexpert.com/discussion/comment/79792792/#Comment_79792792

I have £30k in my Legal & General workplace pension (which my company still contribute to) and £40k in a Zurich Adaptable Pension plan which I haven't paid into since the 90's when it started diminishing in value. I don't even know how I ended up with the Zurich one - I think it was something to do with some dodgy advisors on behalf of a company called Allied Dunbar who may have passed me on to Zurich but I honestly have no recolection of what made me sign up to it. 

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

It is possible that your plan has "safeguarded benefits valued at over £30,000" and thus would require specialist advice in respect of transfer but is it possible that the Zurich customer service agent was somewhat confused and really meant that they would require you to confirm that you had had an interview with Pension Wise before proceeding with your request?

See

https://www.zurich.co.uk/retirement

We’re required to offer to book an appointment with Pension Wise before you take retirement benefits. We are also required to offer this if you are aged 50 or over and are transferring out to access retirement benefits.

You’ll need to confirm if you’ve received their guidance, or opted out of accessing it, before we can proceed with any claim.

To book an appointment, you can:

• call us and we’ll book the appointment for you,
• call Pension Wise on 0800 138 3944, or 
• use their online booking form