Expat unable to claim benefits from Teacher AVCs

Cheery_Littlebottom

Hi Everyone, 
Usually I'm pretty financially savvy as my husband and I jointly manage our investments here in the USA. However, I am stumped by the red tape surrounding taking benefits from a UK pension. The teachers pension and state pensions are easy to deal with. My problem are the AVCs. I have a smallish pot of 40K, I am almost 60, and I would like to take my tax free lump sum and ideally some sort of drawdown instrument to last 7 years until state pensionable age. 
The difficulty lies in the government regulations (from 2017) which insist on me taking financial advice. Unfortunately, the best deal I have been offered is a firm which insists on a fixed rate 3-3,500GBP fee to act in the capacity required to negotiate with Prudential. I do understand fees, but this is an upfront 9% charge. In an attempt to prevent DB holders from being defrauded, the government seem to have created a whole new category of predatory fees to access relatively small amounts.
I have no tax liability in the UK. I do have a bank account there. I know that it is nigh-on impossible to transfer pensions from the UK to the US, sadly.
Does anyone know of any company who can talk to the Pru and offer me any reasonable instrument (drawdown or annuity) into which the fund can be moved?
Many thanks
Becca X

Dazed_and_C0nfused

Cheery_Littlebottom said:

Hi Everyone, 
Usually I'm pretty financially savvy as my husband and I jointly manage our investments here in the USA. However, I am stumped by the red tape surrounding taking benefits from a UK pension. The teachers pension and state pensions are easy to deal with. My problem are the AVCs. I have a smallish pot of 40K, I am almost 60, and I would like to take my tax free lump sum and ideally some sort of drawdown instrument to last 7 years until state pensionable age. 
The difficulty lies in the government regulations (from 2017) which insist on me taking financial advice. Unfortunately, the best deal I have been offered is a firm which insists on a fixed rate 3-3,500GBP fee to act in the capacity required to negotiate with Prudential. I do understand fees, but this is an upfront 9% charge. In an attempt to prevent DB holders from being defrauded, the government seem to have created a whole new category of predatory fees to access relatively small amounts.
I have no tax liability in the UK. I do have a bank account there. I know that it is nigh-on impossible to transfer pensions from the UK to the US, sadly.
Does anyone know of any company who can talk to the Pru and offer me any reasonable instrument (drawdown or annuity) into which the fund can be moved?
Many thanks
Becca X

Why do you believe you must have advice for what is presumably a DC pot?

Does it some safeguarded benefits you haven't mentioned in your post?

Have you asked about simply transferring it to another provider?  From where you can start to take money out.

xylophone

https://www.mandg.com/pru/workplace-pensions/employees/public-sector-avc-schemes/teachers-avc-scheme/taking-the-money-new#accordion-2e942965ce-item-6487ce6ff4

Is Prudential unable to offer you any of the options outlined above?

dunstonh

xylophone said:

https://www.mandg.com/pru/workplace-pensions/employees/public-sector-avc-schemes/teachers-avc-scheme/taking-the-money-new#accordion-2e942965ce-item-6487ce6ff4

Is Prudential unable to offer you any of the options outlined above?

Almost certainly, Pru will not offer a new pension to a US citizen and the problem is that the OP wants to do drawdown.   old Pru plans will do UFPLS but most will not do drawdown

The difficulty lies in the government regulations (from 2017) which insist on me taking financial advice. 

The Pru AVC with the Teachers pension scheme has no such requirement, just like most pensions.

. Unfortunately, the best deal I have been offered is a firm which insists on a fixed rate 3-3,500GBP fee to act in the capacity required to negotiate with Prudential. I do understand fees, but this is an upfront 9% charge.

Fixed amount charges work fine for larger amounts but not for smaller.  Many people call for fixed amounts to be the norm but here you have a problem where it doesn't work.

 In an attempt to prevent DB holders from being defrauded, the government seem to have created a whole new category of predatory fees to access relatively small amounts.

You are incorrect.  A bit of 2+2=5.   You being a US citizen is the problem.   If you were a UK resident then you would not have any problem.    For what you want to do, you need to buy a new financial product and the vast majority of financial firms will not offer their services to US citizens thanks to US laws.

Does anyone know of any company who can talk to the Pru and offer me any reasonable instrument (drawdown or annuity) into which the fund can be moved?

It will almost certainly be cheaper to use UFPLS from the Pru plan rather than seek a firm that deals with US citizens.