Pension tax free cash - blocked due to HMRC delays

Traceyleney

I am wanting to withdraw the tax free cash amount from my DC pension; I have been informed this pension benefits from protected tax free amount (over the standard 25% tax free sum). However I am being told by my pension provider that I am unable to withdraw the tax free cash at this point unless I forfeit the protected tax free amount as HMRC are still trying to determine the calculations pension providers need to apply to calculate this withdrawal. My pension Provider is saying that I will just have to wait and there is no timeline for HMRC to provide this calculation. Meanwhile I’m at risk of defaulting on a financial transaction and am at the mercy of the markets and the general election! Pension wise said My Pension Provider could refer my case to HMRC in the basis of hardship; but it’s not hardship per se, it’s commitment I need to fulfil. Any one else had this problem - how do HMRC get away with it when regulation bangs on about customer harms / consumer duty etc. l, absolutely flabbergasted! 

dunstonh

Any one else had this problem 

yes

 how do HMRC get away with it when regulation bangs on about customer harms / consumer duty etc. l, absolutely flabbergasted! 

It's the consequence of rushed legislation that was not fully thought out.  It's not HMRC's fault.  This is not a regulatory issue.

You either wait or you accept the 25%.  It should be fairly easy to work out the ballpark amount of TFC by looking at the A day figures.    If its 27.8% TFC then you are not giving up much.  Whereas if its 94% TFC you would be better to wait.      However, its up to do you decide if defaulting is worth that.

Hoenir

No need to be at the mercy of the markets. Simply transfer the investments into fund which is cash equivalent. Nor is any major reform to pensions going to be high on the agenda of an incoming Government. Far more pressing matters to be addressed. 

The rules surrounding the "protected tax free amount" are complex. Not something which can be resolved just like that. 

jaypers

Is this in relation to the Transitional Tax Free Certificate? Applied for mine via my IFA at start of the new tax year. Got the extra tax free cash last week so took a while. Original 25% was taken in 2018. Pru is the provider in my case. Believe HMRC have told providers to show due diligence and perform a lot of extra checks. 

SynchromeshBoulevard

I have been caught by this also, I have been trying to draw a pension that matured in May and have been wading through the pension providers 'quill and parchment' processes since February only to be told that the 'HMRC computer' says no!  The pension provider insists on an IFA approving any payment but the IFA cannot approve anything as the HMRC legislation has not gone through Parliament.  I spoke to the Government Pension Guidance Helpline and was told 'it's a perfect storm.... I wish you luck' with it.  Utter shambles !

dunstonh

I have been caught by this also, I have been trying to draw a pension that matured in May and have been wading through the pension providers 'quill and parchment' processes since February only to be told that the 'HMRC computer' says no!  

HMRC does not have a computer that says yes or no.  That isn't how it works.   You may be held up with something but it won't be HMRC (unless specifically linked to one of the areas not yet finalised and you happen to fit that very specific niche - buts its not a computer)

 The pension provider insists on an IFA approving any payment but the IFA cannot approve anything as the HMRC legislation has not gone through Parliament. 

IFAs are not involved in approving any payments.      Only time an IFA comes into play is if there are safeguarded benefits that are not being taken and flexible access is taken instead or on a transfer.

It may help if you find out the actual reasons why you need a transitional tax-free amount certificate and what the blocker is.      If you are nowhere near the pension tax free cash limit and never will be (i.e. in the future) then it shouldn't be necessary.  If you have never previously accessed a pension, again it should not be necessary. 
So, what is it that has given you a reason to apply for a TTFAC?