No 3rd Prty Payments - Should IFA Know About This?

WD987

Hi,

I just lost the oppurtunity to use up some previous pension allowance by making a payment from my Ltd Company to an existing pension fund which was an employer scheme from some previous employment.

I had made the payment and heard nothing but couldnt see the payment in the pension online. Just prior to the 5th April deadline I had a chat with them online and they say they dont accept 3rd party payments.

So I just lost the tax savings on a substantial sum of money because of this.

The IFA said he would chase the payments to ensure they were there before 5th April (which clearly didnt happen) but should he have known about this and warned me to check this Pension could take 3rd party payments so I could make other arrangements if not?

wjr4

Does the IFA manage this pension for you as you say it was a previous employer’s pension and they can’t be servicing agent for them usually. 

Marcon

WD987 said:

Hi,

I just lost the oppurtunity to use up some previous pension allowance by making a payment from my Ltd Company to an existing pension fund which was an employer scheme from some previous employment.

If it truly was an employer scheme (as opposed to some sort of group personal pension, albeit branded with the employer's name), it's highly unlikely you could contribute once you'd left their employment.

WD987 said:

I had made the payment and heard nothing but couldnt see the payment in the pension online. Just prior to the 5th April deadline I had a chat with them online and they say they dont accept 3rd party payments.

So I just lost the tax savings on a substantial sum of money because of this.

The IFA said he would chase the payments to ensure they were there before 5th April (which clearly didnt happen) but should he have known about this and warned me to check this Pension could take 3rd party payments so I could make other arrangements if not?

So you knew before 5 April they wouldn't accept the payment. Bit hard to see how your IFA can be blamed for the fact you didn't then take action immediately to find another home for your company's contribution.

But it might all be a non-drama! The saving grace might be our old friend carry forward. Any reason you can't use that in the current tax year, and simply make the intended company contribution now, plus anything more you want it to contribute in this tax year?

dunstonh

I just lost the oppurtunity to use up some previous pension allowance by making a payment from my Ltd Company to an existing pension fund which was an employer scheme from some previous employment.

Most group schemes or occupational schemes will not accept payments once you cease to be employed with the linked employer.       There are some exceptions.  For example, some Std Life plans can be converted to individual plans.

I had made the payment and heard nothing but couldnt see the payment in the pension online. Just prior to the 5th April deadline I had a chat with them online and they say they dont accept 3rd party payments.

So, that is the expected outcome with the majority of group, AE and occupational pensions.

So I just lost the tax savings on a substantial sum of money because of this.

You said you found out prior to the 5th April deadline.  Seeing as you can contribute into a pension up to around 3pm on the 5th April, you still had time to do it.   (I think the latest, subject to faster payments arriving in time was around 8pm).

The IFA said he would chase the payments to ensure they were there before 5th April (which clearly didnt happen) but should he have known about this and warned me to check this Pension could take 3rd party payments so I could make other arrangements if not?

IFAs are not normally able to get attached to workplace pensions.     If its an older group personal pension or group stakeholder pension then an IFA working for the employer can but your own IFA cannot.

Are you referring to your own IFA or the scheme IFA?  Although in reality, it shouldn't matter as you can see from WJR's response (who is an IFA) and my response that its common knowledge that workplace/group schemes/occupational schemes don't normally allow it.

If they are not an IFA but an FA, then they may not know because their knowledge is limited to their own product range (any mentioning that as research has found that over half of people using FAs think they are IFAs -  we often see it on this site too where someone refers to a sales rep/FA as an IFA).

There is also a world of difference between advice and conversation.  e.g. if you paid the adviser to advise and carry out the transaction, then the adviser is liable.   If you just spoke to them on the phone or by email asking them about paying into a pension, and the adviser knew nothing about the pension type, and you were talking about paying into that, they would have no reason to doubt what you were saying.  i.e.if you said you have a company pension you can pay into, the adviser would just accept that in a conversation.      If you were paying them for advice though, they would carry out the due diligence and check.

There is always a risk of an issue causing a hiccup if you leave it near to tax year end.

WD987

Just to addess some of the questions/comments above:

The IFA had obtained a statement from the pension company but that was some months ago and a final payment had (very slowly) come into the pension. It wasnt checked before the instruction for the final figure was given. Not sure if that was delay from previous employer or delay in showing up in the pension account.

This is my own IFA not a scheme IFA.

Part of the amount being put in would be lost this year as greater than 3 yrs old. 

I had paid the money in some weeks before but they had been slow in showing payments before - hence th IFA saying he would chase.

I only found out about this the day before the pensions comnpanies own cutoff and had commitments the next day which stopped me doing anything about it. They said only payments up to 4:00pm on 4th April would be taken into account for the tax year.

Marcon

WD987 said:

Part of the amount being put in would be lost this year as greater than 3 yrs old. 

I had paid the money in some weeks before but they had been slow in showing payments before - hence th IFA saying he would chase.

I only found out about this the day before the pensions comnpanies own cutoff and had commitments the next day which stopped me doing anything about it. They said only payments up to 4:00pm on 4th April would be taken into account for the tax year.

Nothing to stop you opening a personal pension online and making an immediate payment into that, surely, if this was such a large amount of cash and about to fall out of the 3-year window?