Some more pension advice please?

Nelson1100

Pat38493 said:

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. 

Ha - And therein lies the rub!

Its called the Zurich Adaptable Pension Plan but other than that I don't really know much at all about it, as far as I can tell they keep it fluid and ambiguous so they can just make the rules up as they go along in order to rip me off. I never even took a pension out with them so they never tell me anything. If I look it up on line it just says some bumf about how it aims to give investment growth over the long term, and can be used to provide retirement benefits. It says it covers me, the current value, £41.499.85 and my current payments are nil.

I was sold this pension by someone with the Allied Dunbar in 1995 I didn't really want a pension at the time time but I signed up just to get rid of the bloke. Some years later I got a letter through from Zurich with a form headed "Request for Pension Fund Switch".  I don't know when that was but seeing as they offered an alternative version "on audio tape" I'm guessing a while back. But I never filled it in or returned it I just chucked it in my filing cabinet folder marked pension. Then a year or so later I got a statement from Zurich saying something about a pension annual review so I called them up and said I didn't have a pension with them it must be a mistake. They then informed me that they'd taken it over from the Allied Dunbar, so I said as I didn't know them from Adam, why have you got my money? When did I agree to this? And give me my money back!

Oh no they said you have to wait until you're 55! Ok so I wait a decade or so and once I'm 55 I said Give me my money. Ok they said but we're keeping 40% to give to the revenue!  Oh no you're not because the bloke that sold it to me told me it was tax free and the paperwork given to me by the Allied Dunbar clearly states "The funds themselves are exempted from all uk taxes on income & capital gains."  I've been fighting them and the Financial ombudsman for 4 years over this now.  But of course the ombudsman is paid by the pension companies so he keeps backing them even though I've got all the evidence that I'm right. Zurich are saying its in their small print but I never signed up to that, I signed my agreement with Allied Dunbar.

But still to this day Zurich haven't told me anything really. I've spent hours on the phone to them but I never get a straight answer and the Financial Ombudsman doesn't even reply to my emails any more, I've raised several complaints against him but no one ever responded.

But I have so many unanswered questions: How Zurich got their hands on my money without my knowledge or consent, why I was never offered any sort of refund or compensation for the fact that my Allied Dunbar pension had disappeared, why they were allowed to create their own rules regarding my pension, and now why can't I take I take my money elsewhere unless I pay one of your mates £1845 to say its ok.  "Well you can if you like but we're keeping £5k!"

I know what'll happen next, I'll pay the £1845 and they'll say ok we're just about to transfer your money but you need to get counter signatures from a circus acrobat and the Pope, its in the small print of the rules that have just come out of our printer!

Honestly I'd rather have money lodged with a Nigerian Prince than this lot!

Pat38493

Ok so probably you need to get an appointment with Pensionwise and take the documents to show them.  

Did you read the entire content of the letters you received in past years?  Your pension with Allied Dunbar didn’t disappear - Zurich took over Allied Dunbar pensions in 1998 - as in they bought the entire company, so your pension was still there with the same terms and conditions etc but it was now part of Zurich.  This in itself didn’t change anything for you other than the brand name on the letters and documents - nothing was lost.

The fact that the payments you put in the pension are tax fee, and whilst the money is in the pension wrapper all of the dividend income and growth (capital gain) is tax free, doesn’t mean that there is no income tax payable on the time when you decide to draw the money out - if you decide to draw the entire amount out in one year, and you are already a 40% taxpayer through your job, you will for sure pay 40% tax on the pension amount you draw out.  Sounds like you were a higher rate taxpayer at the time due to your salary.

I’m glad you didn’t do that because in the end you are much better off waiting until you are not earning any other income before taking money out of your pension schemes.  I would have hoped that they would have explained this to you properly at the time.

However if you wait until you are not earning any other money or are within the income tax limit after you stop working, you can potentially get that Zurich money out tax free if you time it correctly (subject to knowing a bit more about it because we still don’t know what the safeguarded benefits are in that scheme - is there anything in the documents about guaranteed annuity rates, payouts on death or something like that?  You will get the Zurich money out eventually so I wouldn’t stress too much about it it.

Anyway if I was you I would probably focus more on trying to pay as much of my salary as possible into the existing pension for as long as you are still working - the amount in the Zurich pension will just sit there and can be sorted later.

xylophone

Do you have the original documents relating to this pension?

If so, read them carefully. 

Is there any indication of any kind of guarantee? See the link in my previous.

xylophone

If there are no safeguarded benefits, there should be no need for you to obtain specialised advice in respect of a transfer to another pension scheme.

Why not  take an appointment with Pension Wise so that if necessary you can confirm to Zurich that you have done this?

And see

https://www.legalandgeneral.com/retirement/pensions/transfer-workplace-pension/

Yes. It’s simple to transfer all your pensions into a Legal & General Workplace Pension. You can view them all in the same place through Manage Your Account.

Pat38493

You have not been ripped off or scammed.

It's perfectly normal for investment documents to say that there is no guarantee your money won't go down as well as up - it's legally required for them all to say that, and most everyone in this forum is signed up to all sorts of funds and deals that say exactly the same thing.  Are we all idiots too?  This is not a sign of a scam.

When the document talks about a payment term, you need to take those documents to PensionWise (or post the relevant sections of the document here and the summary from the document which describes what this policy actually is.  I am starting to suspect this is some kind of life / pension policy which is supposed to pay out on your death as well as providing a pension, but without seeing the full relevant documentation we can't say and unless you post it here (obviously without any identifying information like your real name), there's not much more I can say on that policy.  Only that nothing you have posted sounds abnormal or like a scam - you put money into a scheme, and it still has a value after 30 years, and you will be able to take it out at some point - how is that a scam?

As far as I remember Allied Dunbar was a company that specialised in life assurance - as such this also makes me suspect there is some kind of life element here.

We would also need to know if there are items in the document that explains how you are supposed to take the money out at the end of the policy e.g. does it mention that you have to use an annuity or some other way?

Money that you take out of a pension is always taxed at your marginal tax rate, excepting for the 25% tax free.  This means that if you are already paying 40% tax due to your 52K salary in that tax year, you will pay 40% tax on any money you take out of any pension scheme in that year.  You can of course wait till a later year when you don't have salary income .  This is what you signed up to when you signed up for a pension scheme.  As far as I know this has always been the case since the 1990s and earlier and is not some new rule that was made up recently.

Pension schemes are very good assets if you use them properly, but your approach of "give me all my money back now" is not how pension schemes are supposed to be used.  Generally you take the money out in a slow way over many years to minimise your tax exposure.  by the way, when you first put the money in, you were given tax breaks that increased the money at that time - the tax that you pay when you take it out is simply taking back some of that tax relief that you got at the time, and even that can be avoided or minimised with careful timing.

I think you would be better off to make an appointment with PensionWise and maybe also bit the bullet and get an IFA - please don't take this the wrong way, but it seems from your posts like you get angry about these things very easily, and very few sensible investment decisions are made by people when they are angry or emotional.  Also it's fine to take a step back, wait a few days and calm down and then decide what to do.

dunstonh

Its called the Zurich Adaptable Pension Plan but other than that I don't really know much at all about it, as far as I can tell they keep it fluid and ambiguous so they can just make the rules up as they go along in order to rip me off.

Actually, they don't.  The terms of that pension haven't changed since it was put in place.

They then informed me that they'd taken it over from the Allied Dunbar, so I said as I didn't know them from Adam, why have you got my money? When did I agree to this? And give me my money back!

You didn't need to agree to their re-brand from Allied Dunbar to Zurich.   Unless you are a shareholder in a company, you get no say in what a company decides to do.  

Oh no they said you have to wait until you're 55! Ok so I wait a decade or so and once I'm 55 I said Give me my money. Ok they said but we're keeping 40% to give to the revenue!  Oh no you're not because the bloke that sold it to me told me it was tax free and the paperwork given to me by the Allied Dunbar clearly states "The funds themselves are exempted from all uk taxes on income & capital gains."  I've been fighting them and the Financial ombudsman for 4 years over this now.  

Pensions have never been tax free.   However, the funds are exempt from income and capital gains.    You are fighting the FOS on a misunderstanding on your part.

 But of course the ombudsman is paid by the pension companies so he keeps backing them even though I've got all the evidence that I'm right. Zurich are saying its in their small print but I never signed up to that, I signed my agreement with Allied Dunbar.

The ombudsman is not paid by the pension companies.    The FCA charges all regulated firms levies each year.   Firms have no say in those levies.  They are just billed them and told to pay them.  The FCA then pass a proportion of the total levy taken across the industry to the FOS and other regulatory bodies.

The ombudsman is not agreeing with you because you are wrong.

But still to this day Zurich haven't told me anything really. I've spent hours on the phone to them but I never get a straight answer and the Financial Ombudsman doesn't even reply to my emails any more, I've raised several complaints against him but no one ever responded.

They have probably classified you as a vexatious complainant. 

But I have so many unanswered questions: How Zurich got their hands on my money without my knowledge or consent, why I was never offered any sort of refund or compensation for the fact that my Allied Dunbar pension had disappeared, why they were allowed to create their own rules regarding my pension, and now why can't I take I take my money elsewhere unless I pay one of your mates £1845 to say its ok.  "Well you can if you like but we're keeping £5k!"

Easy to answer
1 - Allied Dunbar rebranded to Zurich.  Your pension didn't change.   Just the logo and name in the corner.
2 - Your Allied Dunbar pension hasn't disappeared.   What a company calls itself doesn't change your pension.
3 - They have not changed any rules regarding your pension.    The Government changed some rules in 2015 but only increased the options. They didn't reduce them.  Every option you could make when you took this plan out still exists today.   Plus a few more.
4 - If you have safeguarded benefits and the value is over £30,000 then the law requires you to seek advice if you are trying to access your pension flexibly or transfer it to another provider where the safeguarded benefits would be lost.   This is consumer protection as the vast majority of safeguarded benefits are valuable.
5 - Tax is charged on income in the UK.  if you were to draw the whole pension out as a lump in a single tax year, then you will pay tax on it.  The Government is in control of taxation. Not the pension company.

I know what'll happen next, I'll pay the £1845 and they'll say ok we're just about to transfer your money but you need to get counter signatures from a circus acrobat and the Pope, its in the small print of the rules that have just come out of our printer!

I suspect there are no safeguarded benefits.  I suspect that you have read some generic text.  Or perhaps just a handful of words in a sentence and have jumped to all sorts of incorrect assumptions.   The AD Adaptable Pension Plan was a marketing name used for their personal pension plan, their Free Standing AVC and their Executive Pension plan.   None of these had any safeguarded benefits.  However, the EPP does have the potential for increased tax free cash, which can be valuable but is not classed as a safeguarded benefit.

You seem angry about things yet nearly everything you have posted here is incorrect or irrelevant or based on a lack of knowledge and assumptions.  If you calmed down and became more rational and made an effort to read and understand what you are being told then you wouldn't have this problem.

Nelson1100

I have to say I disagree with the fact that my pension hasn't changed. When I took it out with Allied Dunbar there was a branch round the corner from my house, I could pop in, see the guy that sold the pension, ask questions and get simple explanations. Ever since Zurich took it over I have no idea who's got my money, when and how much I can take out because they introduce new clauses into the agreement whenever they feel like it.  
I can guarantee you AD told me that the payout at the end would be tax free, and it says so in black and white in my agreement. Every single person I've shown it to says that how it reads, if the Zurich pension was the same as the AD one then it should be tax free or I should have a claim that it was mis-sold. And who decides that its was all perfectly legit? The ombudsman!

The ombudsman who is paid by pension companies because they've admitted it themselves. Maybe the FCA dishes it out but the money comes from crooks like Zurich.  Put it this way if drug dealers funded the police force is it more or less likely that drug dealers would be arrested? Exactly!

So after spending literally hours on the phone to Zurich today they have finally agreed to transfer my pension in full to L&G in one lump without any form of penalty, tax or deduction. Funny how once I started kicking off they decided they weren't going to keep my £5k?

Result!

No!  Because now L&G have changed their tune (surprise surprise) yesterday they said I could transfer as much I liked into my pension so long as Zurich agreed.  But today when I rang them and said ok Zurich are on board lets do this transfer they're now saying they need a financial advisor to authorise it! What?  They want me to pay for a financial advisor because they need a form filled in to cover themselves so that I can give them my money?
According to one of the idiots at L&G I can pay £40k from my bank into my pension no questions asked but if I want to transfer it in from their mates at Zurich I've got to pay someone the thick end of £2k to say its ok!!!  They did say as an alternative to paying £2k for a financial advisor I could cash in the Zurich pension and pay it into the L&G one but I'd have to give the revenue £12,300!!!!
I kid you not, these are actual conversations with real people that control my money, if it wasn't so tragic it might even be funny.

So the advice I was given by a bona fide financial advisor recommending I amalgamate my pensions turns out to be ridiculous because even though the L&G one is worth 4.5% less than I paid into it if I combine the two I will lose anywhere between 4.5% and 30% on the Zurich one!  I'm just glad I didn't pay £2k for that gem!

Plenty of people saying pensions aren't a scam but I don't see how you can look at it any other way, everything is tilted in favour of everyone involved but the pension holder. The pension companies make money, the financial advisors make money, the revenue make money and who's the only person that loses money in the whole sorry affair? The mug thats put all the money in!

Nelson1100

Pat38493 said:

- please don't take this the wrong way, but it seems from your posts like you get angry about these things very easily, and very few sensible investment decisions are made by people when they are angry or emotional.  Also it's fine to take a step back, wait a few days and calm down and then decide what to do.

I won't take it the wrong way and I appreciate everyone taking the time to help - you're right though I am angry, I'm seething, I've worked extremely hard for every penny I've got and to find out other people have now got control of big lumps of it & there's nothing I can do with that money without someone else getting a chunk is hard to swallow. 

And I did almost make a bad decision when I was raging at L&G today, I was a hairs breadth away from cashing the lot in & taking the 40% hit just so I could feel in control again! I might do as you suggest and walk away for a while.

Pat38493

Ask them to tell you in writing the specific reason why a financial adviser has to authorise it?

Normally if there are no safeguarded benefits in the Zurich pension, which seems to be the case based on Dunstoh's last post, there is no reason for L&G to insist on you taking financial advice, although they might insist that you sign some forms to say that you have decided to do this anyway.  

Also if you called them idiots on the phone (hopefully not), it probably didn't help the flow of communications and understanding.

The financial adviser that you spoke to earlier for 30 minutes - I would be very surprised is they gave you official "advice" based on a 30 minute conversation - they might have given you a steer based on the limited information they were able to gather in a 30 minute chat, but it would certainly not constitute "advice" based on the legal definition.  

If your Zurich original contract said that you would be able to take the money out of the pension tax free at the end, feel free to post the full text in its original context.  This would be extremely surprising but if this turned out to be true, rather than you misunderstanding the terminology and context, you might have a legalcase (although I'm not sure if you could go back that many years legally if this was 30 years ago).

Also - the other reason why this isn't a scam is that you are not under any obligation to transfer your Zurich pension to the L&G one.  To me this seems like a fairly minor point.  Your Zurich pension only forms a relatively small part of your total assets based on your prior posts so if what you are posting is really correct, you may be better off simply leaving the Zurich pension in place and drawing on it at some point in the future.  This doesn't really seem like a big deal compared to his proposal to pay as much of your salary as possible into your L&G pension which is the part that will benefit you much more.

It's also been said to you quite a few times now that the tax that they would charge if you "cash in" the pension scheme is based on how much income you are already earning in that year - if it's really true that you had to cash in the scheme in order to pay it to L&G (yet to be proven), you should wait until you have stopped working before taking further action.

Some of the money in your pensions constitutes tax rebates that were given to you by HMRC under the law and so it's not directly "your" money in the sense that you can only get your hands on it when you follow the rules of how pensions legally work.  When you sign up to a pension you are entering a contractual and legal arrangement which means you can only access the money at a certain time and conditions, in exchange for some very desirable tax benefits.

Would you  go to your payroll department at work on the 3rd day of the month and say "I've worked 3 days of the month I want my money now"?  This would point out that you signed a contract that says you get paid on day X of the month in arrears.

Also I would draw your attention to the first parts of your original thread - you stated that you only need minimum £600 per month to live in retirement.  It was pointed out to you that even if you do none of the above points, you have plenty of assets to have more than £600 per month, so if this is really stressing you out so much, you don't need to do anything at all - what you are doing above would just potentially increase your retirement income a bit.

(By the way £600 per month is less than most retirement planning websites would consider as the minimum retirement income for a retired person, but if you think you can manage on it that is fine).

xylophone

I have to say I disagree with the fact that my pension hasn't changed. When I took it out with Allied Dunbar there was a branch round the corner from my house, I could pop in, see the guy that sold the pension, ask questions and get simple explanations.

https://en.wikipedia.org/wiki/Allied_Dunbar

The fact that there isn't a  branch (agency?) of Zurich round the corner does not change the terms of your pension.

If you  held an account with Barclays and your branch was closed, would you consider that  the terms of your account had changed?

I can guarantee you AD told me that the payout at the end would be tax free, and it says so in black and white in my agreement. 

Could you upload the relevant clause?

it would appear that Zurich have advised you that there are no safeguarded benefits in this DC pension and that as far as they are concerned, you do not  need to demonstrate to them that you have taken financial advice before they would comply with L&G's request  for them to execute the transfer.

There is no indication here

https://www.legalandgeneral.com/retirement/pensions/transfer-workplace-pension/

that L&G would require any  standard DC transfer to go through a Financial Adviser - it is possible that they have omitted the fact or perhaps after all the angst concerning your proposed transfer, someone has got cold feet about taking it on unless assured that you are quite sure of what you are doing? 

You could approach another pension provider concerning the pension transfer?