Phoenix life - having issues taking 25% out

Leifcov

I've had a pension with Phoenix Life for a while, it's only small and decided to take out 25% as a lump sum which is tax free.  On calling Phoenix Life, I was told that they can't do this as they are not offering new products, so I have to transfer my pension to a new provider and then take the 25% through them.  They have recommended Standard Life, and I have started the application process which looks like it will take about a month to complete and then have to start the process of taking the 25% out through Standard Life.  This seems unnecessarily complicated and longwinded, and they don't say anywhere on their website that to take out the 25% you need to go through a different company.  I'm not sure if there are any implications of me moving to a new pension provider.  Any advice or guidance would be really appreciated.  Thank you in advance. 

xylophone

I've had a pension with Phoenix Life for a while, it's only small and decided to take out 25% as a lump sum which is tax free.  On calling Phoenix Life, I was told that they can't do this as they are not offering new products, so I have to transfer my pension to a new provider and then take the 25% through them. 

The pension is an old plan not designed to offer flexible options.

To access such options you need to transfer to a modern plan.

Linton

The reason is likely to be that it pre-dates the pension law changes and will only support taking the 25% when you buy an annuity. Pension schemes can have their own bespoke IT and documented procedures.  It is unlikely to be economically justifiable to replace these. So if you want something different you will have to transfer to a pension that does support the latest rules.

This is normal.  Tere are no particular implications provided the pension does not have certain guarantees - Guaranteed Annuity Rate being a common example.  If there are let us know and we can explain the consequences.

SouthCoastBoy

Something to be aware of if transferring a pension is that the transfer value may be lower than the value if you kept it with the original provider. I have an old NPI pension, now with Phoenix, for contracted out NI contributions, the transfer value quoted on my annual statement is a lot lower than the value quoted if I keep it with Phoenix Life. I think this is related to the final bonus, but no expert, and not too sure the implications for my pension when I want to get my hands on it.

My retirement date is set at 65 on the plan so I'm hoping at that point I would be able to take it all out with no loss of fund value (currently only worth 20k, so should cover 10 mths spending).

dunstonh

On calling Phoenix Life, I was told that they can't do this as they are not offering new products, so I have to transfer my pension to a new provider and then take the 25% through them.  

That is normal for most legacy pensions.    Its a bit like owning a black and white TV but then expecting it to offer Ultra HD and Dolby Atmos sound or owning an Iphone 1 a and wondering why it cant do things that an Iphone 14 can.

 They have recommended Standard Life, and I have started the application process which looks like it will take about a month to complete and then have to start the process of taking the 25% out through Standard Life. 

Standard life sold their brand to Phoenix.  (Old Standard Life now use the Abrdn brand).   This is why they are putting you through Standard Life. 

 This seems unnecessarily complicated and longwinded, and they don't say anywhere on their website that to take out the 25% you need to go through a different company. 

It would be unnecessarily complicated to recode the software on products built 20-60 years ago.    
They wont say it in on their website as they have some plans that offer certain drawdown options.

 I'm not sure if there are any implications of me moving to a new pension provider. 

You will lose any safeguarded benefits on the existing plan, if any.  If the fund value is over £30,000 Phoenix will stop you from doing the transfer and tell you that you need to seek advice from an IFA.

Albermarle

It can be a bit confusing.

Phoenix traditionally bought 'closed books'. What that means in English is that they buy old pension schemes from the original providers, who maybe want to get out of the business. Normally these schemes are not being contributed to anymore.
So Phoenix get the pension funds, the clients and the paperwork/admin/IT system that comes with it. They run these funds until all clients eventually have bought an annuity or transferred out ( because they do not want to buy an annuity)

In the last couple of years they also bought the retail side of the Standard Life pensions business. This was unusual for Phoenix as Standard Life was still a live operation, customers still making contributions etc. Also SL could offer more flexible withdrawal options like drawdown. So far nothing has changed, and if anything SL have been advertising more for new customers/business.

So naturally they have recommended you to transfer to a company owned by them, although a different entity from the pension you have now.

Nothing wrong with Standard Life by the way, but there are also many alternatives/competitors.

dunstonh

In the last couple of years they also bought the retail side of the Standard Life pensions business. This was unusual for Phoenix as Standard Life was still a live operation, customers still making contributions etc. Also SL could offer more flexible withdrawal options like drawdown. So far nothing has changed, and if anything SL have been advertising more for new customers/business.

And, ironically, I just set a client up on the Abrdn Elevate platform this morning and the paperwork generated still had Standard Life in the corner!    But nothing to do with Phoenix and technically, nothing to do with Standard Life any more.

Leifcov

Thank you to everyone for the helpful and informative responses.  It's certainly a lot clearer than the explanations I got from Phoenix Life!!  I really do appreciate your help,  thank you.  M 

handful

Not sure if it's relevant in any way but I recently transferred a pension from Phoenix Life to my SIPP and it was one of the most frustrating experiences that I've ever had. A catalogue of errors, misinformation and broken promises on their part, ending in a formal complain that I believe has been forgotten about as I've heard nothing from them since. Much of it was in the name of scam prevention but they were truly awful. I hope you get on better than I did! Good luck.

dunstonh

Not sure if it's relevant in any way but I recently transferred a pension from Phoenix Life to my SIPP and it was one of the most frustrating experiences that I've ever had

Phoenix have many offices and their service varies signfiicantly over the offices.  Ex Pearl tends to be very good.

. Much of it was in the name of scam prevention but they were truly awful.

Sounds like you were captured by the regulators new process.   That is a real pain in the neck and causes significant delays.

SIPPs (as in real ones, not pretend ones) fail an amber flag as they allow overseas investments.  This means the ceding scheme has to carry out enhanced checks.   At the same time they have to limit the information during the process to ensure it cannot be used to tip off a potential scammer.

In general, the retail pension providers that use Origo tend to be as smooth as normal.  However, administrator-controlled pensions (i.e. workplace/ex workplace) or small players or non Origo are making a meal out of the changes.

The new rules allow the ceding scheme to make a risk-based decision but too many are defaulting to requiring moneyhelper calls to pass the buck or taking their time making that risk based decision.  Origo to Origo seems to be smooth as those providers are pre-checked.  Ceding schemes should be building safe lists as well.  Although some don't appear to be.   Its when you are using a niche or unusual provider or one the person at the ceding scheme hasnt heard of that the problems tend to occur.