[Solved] Problems drawing down a Std Life personal pension as a non-UK resident

RastaDog

I'm French resident and have a small personal pension with Standard Life that I am trying to drawdown fully. Std Life have informed me that is my only option; no annuity, no flexible/partial drawdown - 100% drawdown is my only option. I seem to be running into hurdle after hurdle trying to do that.

Std Life will not transfer to an non-FSCS registered/compliant bank. (They would however transfer to a foreign bank account, even though they are obviously not FSCS compliant!) So my Wise and Revolut accounts were not allowed - fair enough, I get that. for my safety etc. (Btw, my long standing UK bank account was closed, by the bank, a few years ago due to me being non-UK resident) I then, eventually after more hurdle jumping, opened an account with HSBC UK having passed all of their required identity and address verification checks.

Std Life now say they will not transfer to my HSBC account because the bank statement I sent them "would need to include daily transactions". My request for clarification of this phrase (it is ambiguous to me) has been ignored - maybe they think I'm being pedantic! I don't know whether they refer to a type of transaction OR a number of transactions. The former, I might be able to do something about (if they'd tell me what type of transaction works for them) The latter, no. Being non-UK resident, I understandably do not spend in sterling often so my statements do not show more than a couple of transactions - nothing I can realistically do about that.

Is there a legal requirement as to the number or type of transactions seen in the recipient bank account? I feel it's a Std Life policy but I can't see the rationale behind it. It seems like a catch-22 that forces me to take the drawdown into my French (euros) account. I really don't understand why Std Life are insisting on it - the catch-all 'AML' reasoning maybe? Though I don't see how this particular policy assists in that aim.

The irony for me is that even if my long-standing UK bank account hadn't been closed, it would still have fallen foul of this 'daily transactions' policy. I simply do not spend in £ that often. I'm sure many/most non-UK residents are the same, that seems to me to be self-evident. So why go basing a policy around something that will clearly be an insurmountable hurdle for perfectly ordinary folk. It's not customer service to dictate a course of action.

My exchanges with Std Life are not helpful, as I said they will not clarify what they mean and keep repeating the same phrase. I'm going around in circles, it feels like I'm trying to hit a moving target. Do you think Standard Life have an overly restrictive internal policy with regards to paying out drawdowns?

I have read about people having to transfer their pensions to another company just so they can drawdown. Is it the case that pension companies make it difficult for you to access your funds?

dunstonh

I'm French resident and have a small personal pension with Standard Life that I am trying to drawdown fully. Std Life have informed me that is my only option; no annuity, no flexible/partial drawdown - 100% drawdown is my only option. I seem to be running into hurdle after hurdle trying to do that.

That is not quite right.  SL would have told you the only option that they offer on the existing plan.     As an EU resident, SL cannot retail financial services products to you.   i.e. a drawdown plan or annuity.   However, that doesn't mean others cannot.

Std Life will not transfer to an non-FSCS registered/compliant bank.

There are no non-FSCS registered banks.    I think you may be referring to payment services rather than banks.

(They would however transfer to a foreign bank account, even though they are obviously not FSCS compliant!) 

That is because they are banks and not payment services.  FSCS is not relevent.

 So my Wise and Revolut accounts were not allowed - fair enough,

There you go.   Neither of those are banks.

Std Life now say they will not transfer to my HSBC account because the bank statement I sent them "would need to include daily transactions". 

I suspect that is an anti-fraud measure.   Std Life, like many others, require a bank statement to validate the bank details.  However, they also run it through the electronic checking system and a bank account with no transactions probably hasn't registered on that system yet.

Is there a legal requirement as to the number or type of transactions seen in the recipient bank account? 

Its not a legal issue.

 I feel it's a Std Life policy but I can't see the rationale behind it. It seems like a catch-22 that forces me to take the drawdown into my French (euros) account. I really don't understand why Std Life are insisting on it - the catch-all 'AML' reasoning maybe?

Its mostly anti-fraud and AML (money out now falls under the AML rules - it never used to).     Most people would have a bank and there would be no issues. 

I'm sure many/most non-UK residents are the same, that seems to me to be self-evident. So why go basing a policy around something that will clearly be an insurmountable hurdle for perfectly ordinary folk. It's not customer service to dictate a course of action.

In reality, most people would want it to go to their bank account and not a money services account.     So, you fall under an unusual niche.

Do you think Standard Life have an overly restrictive internal policy with regards to paying out drawdowns?

No.  I have several clients with SL who live overseas and the money goes into their bank accounts with no issue.

I have read about people having to transfer their pensions to another company just so they can drawdown. Is it the case that pension companies make it difficult for you to access your funds?

If you bought a tv from the 1980s,. would you expect it to now be a widescreen, ultra HD with Atmos sound?     No.  Pensions are the same.   You cannot expect functionality introduced relatively recently to be on products that are decades old or never built to have that functionality.

The pension providers don't make it difficult for the vast majority.   You are just unusual by not having a bank account (or not wanting it to go to your bank account).

RastaDog

Thank you for that detailed response.

The technicalities of it are interesting but the bottom line is when Standard Life said they would not pay into my Wise/Revolut account, they cited FSCS...

"The reason for this is because they are not covered by the Financial Services Compensation Scheme (FSCS) and therefore are not considered a bank in the UK"

...as I said, no problem, I understand that. That's why I opened an HSBC account as it is covered and so is considered a bank.

dunstonh said:

You are just unusual by not having a bank account (or not wanting it to go to your bank account).

Have I misunderstood you? I DO have a bank account (the HSBC one I mentioned)  and I DO want the funds to go into it. The say however that the account statement "would need to include daily transactions". This is the nub of my question - what are they? Is it a type of transaction OR a transaction volume/count per month or somesuch. I don't know and they haven't clarified it for me.

I think however this might hint at a potential solution for me.....

dunstonh said:

I suspect that is an anti-fraud measure.   Std Life, like many others, require a bank statement to validate the bank details.  However, they also run it through the electronic checking system and a bank account with no transactions probably hasn't registered on that system yet.

What is this electronic system and what is it looking for? The bank statement I provided Std Life with had 2 transactions on it, both bank transfers. Do I need more transactions OR transactions of a different type? How do I make my bank account register on this system so that it might be validated.

dunstonh

The technicalities of it are interesting but the bottom line is when Standard Life said they would not pay into my Wise/Revolut account, they cited FSCS...

FSCS comes automatically by being a bank.  So, it may be just how they prefer to describe it.  Indeed, with bank names they do not recognise there is an FSCS register where they can type it in and it tells them whether its a bank or not.  So, they may use that register.   Anyway, the methodology they use is largely speculation but the fact they refuse to use payment services is common across providers.

Have I misunderstood you? I DO have a bank account (the HSBC one I mentioned)  and I DO want the funds to go into it. The say however that the account statement "would need to include daily transactions". This is the nub of my question - what are they? Is it a type of transaction OR a transaction volume/count per month or somesuch. I don't know and they haven't clarified it for me.
I think however this might hint at a potential solution for me.....

This could be for two reasons.

1 - when you use a bank account in the UK, it generates an electronic trail with certain retailers/service providers which means the electronic bank verification system will find that account registered against your name.  I know SL use that service.    If there are no transactions that get registered, then no electronic trail would be built up and the electronic check would fail.

2 - If they are relying on paper/pdf statements, then a newly opened bank account with zero transactions is fraud risk.   You could be suffering a totting up of issues here on the fraud risk scale - i.e. overseas, preference to use money services with higher levels of fraud, then reverting to use an account with no transactions, refusal to use main banking account etc.   One thing in isolation may not be an issue but when you look at the things collectively, it has the hallmarks of what fraudsters try to do.

Your first post indicates you have a French bank account.   Is there any reason why you do not want to use that?

RastaDog

dunstonh said:

Your first post indicates you have a French bank account.   Is there any reason why you do not want to use that?

Simply that I'd prefer the funds in sterling. Nothing sinister. That way I can monitor exchange rates, reduce bank charges and transfer only the amounts I need as and when I when I need to. Payment directly to my French bank is an option (though it's in a joint name so, who knows, there might be a problem with that too!) but it's not my preferred option, and I'm not refusing to use it. If I have to, I will... as a last option. 

As for my preference to use money services, that's not entirely correct. It was my only option at that time if I wanted to take payment in sterling, as i do. I didn't know there was an issue with it until I spoke with SL. Equally, I asked them about payment into my wife's UK bank account, and that was a 'no' too. Again, it's why I opened the account at HSBC. I do hope my 'in all innocence questions' to them have not been interpreted as fraud, as you suggest! I'm only exploring options and finding the obstacles.  
 
Have you any idea what kind of transaction I might need to make to register my new bank account on this 'electronic  checking system'?

RastaDog

Actually, thinking about it, in fairness to Standard Life they themselves may not know exactly what this checking system is looking at. It's possibly 'black box' in that respect and all they know is that the computer says no.

Once upon a time, I worked for a credit reference agency and the credit ratings algorithms were an unknown to most of us (outside a select team) We knew the type of data that influenced a credit rating but the exact calculations, no.

So I suspect that there is no simple answer to my question. I suspect to get the computer to say yes, I'd have to build a history of multiple transactions of varied types over a period of time - and the specifics of each of those factors would be guess work on my part, a succession of trial and errors, which in itself would probably raise a flag!

So realistically I think it is not something I could easily do. Well, I could give it a go but it's probably not worth the time and effort. Nope, I reckon I'll just have to bite the bullet and accept that payment into my French bank is the path of least resistance. Seems almost ironic somehow. Can't do the checks so good to go. 

Novice_investor101

Daily transactions effectively means they want it to show evidence that it’s used as a normal, everyday bank account rather than one you’ve opened purely to receive this payment (red flag for AML). Evidence is things like buying a coffee at St*rbucks every morning, shopping at tesco a couple of times a week, rent/mortgage & utility bills going out, wages coming in etc. 

Marcon

RastaDog said:

dunstonh said:

Your first post indicates you have a French bank account.   Is there any reason why you do not want to use that?

Simply that I'd prefer the funds in sterling. Nothing sinister. That way I can monitor exchange rates, reduce bank charges and transfer only the amounts I need as and when I when I need to. 

You've said above that it is a 'small' pension and that you have only one option: take the whole lot in one go - so monitoring exchange rates, reducing bank charges and transferring amounts 'as and when' sound a bit as if they aren't going to apply here?

RastaDog

Marcon said:

RastaDog said:

dunstonh said:

Your first post indicates you have a French bank account.   Is there any reason why you do not want to use that?

Simply that I'd prefer the funds in sterling. Nothing sinister. That way I can monitor exchange rates, reduce bank charges and transfer only the amounts I need as and when I when I need to. 

You've said above that it is a 'small' pension and that you have only one option: take the whole lot in one go - so monitoring exchange rates, reducing bank charges and transferring amounts 'as and when' sound a bit as if they aren't going to apply here?

You misunderstand me; I mean doing those things when I have the lump sum in my sterling current account for transfer as and when into euros. I have very little contol over such things if Std Life transfer it directly to my French bank. 

RastaDog

Novice_investor101 said:

Daily transactions effectively means they want it to show evidence that it’s used as a normal, everyday bank account rather than one you’ve opened purely to receive this payment (red flag for AML). Evidence is things like buying a coffee at St*rbucks every morning, shopping at tesco a couple of times a week, rent/mortgage & utility bills going out, wages coming in etc. 

Yes, I've come to think that's it, thank you. If only Std Life had said that! The phrase was unknown to me hence me seeking clarification from them. Them simply repeating it got me nowhere, only confused me as to what my next step was.

As it happens, I don't think I can pass the test since, as I've said, not living in the UK I simply don't have that volume of transactions in my HSBC account. I suspect I'm not the only non UK resident that'd find it hurdle they can't jump.

No wonder some folk have to transfer their pensions to another provider just so they can receive their funds. (Aparantly, some companies won't do overseas transfers) 

OldBeanz

You say your wife has a UK bank account. Can you make that a joint account or can you pay anything on her behalf; exchange money with her; swap money with relatives?