Pension drawdown and fair pricing query.

immy1

I want to take 25% tax free from my private pension.  The total amount of the pension is under 10k. 
Up until a few years back you were able to check the price you would receive on the Legal and General website and opt to take the pension if the live price was right for your needs. A friend did this a few years ago when she took her lump sum.
Now, however, the rules seem to have changed and the option of choosing to take a lump sum online has been removed so you cannot benefit from either taking the lump sum after taking into consideration the live price or leaving it if the live price is low. 
Legal & General now send out the option forms to you and when they receive them back they calculate the price you will get. You do not know what this price will be but they say they have 2 days to enact your wishes from the day they receive the forms back.  
I have queried this with the L & G who have said the change was due to the fair pricing requirements of the government. Also they do not have time  or the staff to phone the customer on the day of calculation so you know exactly what you are getting. 
I am worried that should the price prove to have fallen considerably on the day of calculation then I will be stuck with that price. 

Sorry I know this post is a bit long-winded but couldn't  explain the details otherwise.  Thanks in advance for any responses to this query. 

Hoenir

What's your pension pot invested in? 

immy1

Hi.  As I am over state pension age now it is just invested in L & Gs low risk fund. 

Marcon

immy1 said:

I want to take 25% tax free from my private pension.  The total amount of the pension is under 10k. 
Up until a few years back you were able to check the price you would receive on the Legal and General website and opt to take the pension if the live price was right for your needs. A friend did this a few years ago when she took her lump sum.
Now, however, the rules seem to have changed and the option of choosing to take a lump sum online has been removed so you cannot benefit from either taking the lump sum after taking into consideration the live price or leaving it if the live price is low. 
Legal & General now send out the option forms to you and when they receive them back they calculate the price you will get. You do not know what this price will be but they say they have 2 days to enact your wishes from the day they receive the forms back.  
I have queried this with the L & G who have said the change was due to the fair pricing requirements of the government. Also they do not have time  or the staff to phone the customer on the day of calculation so you know exactly what you are getting. 
I am worried that should the price prove to have fallen considerably on the day of calculation then I will be stuck with that price. 

Sorry I know this post is a bit long-winded but couldn't  explain the details otherwise.  Thanks in advance for any responses to this query. 

The rules are what they are, so not quite sure what you're expecting anyone to say - but if you're in a low risk fund, the danger of a dramatic drop isn't high.

immy1

L & G pointed out the same that the risk is low but it would be just my luck for a sudden drop in the market and I would not get what I am hoping for. It has happened before as I monitor the price regularly and it does fluctuate quite a lot. I know they are stuck with the government requirements but to say that they do not have the resources to phone or email me on the day of calculation seems unfair. This is money I absolutely cannot afford to take if the price drops considerably and I am worried. 

Linton

You cannot get a live price for any fund under any circumstances.  Fund prices are calculated by the fund manager usually once per day and all buys/sells outstanding at that time are carried out at that price.

If you can tell us what the fund is we can comment on what sort of variation would be expected.

dunstonh

Now, however, the rules seem to have changed and the option of choosing to take a lump sum online has been removed so you cannot benefit from either taking the lump sum after taking into consideration the live price or leaving it if the live price is low. 

There has been no change in rules.  What you are referring to is a change in the software.

I have queried this with the L & G who have said the change was due to the fair pricing requirements of the government. Also they do not have time  or the staff to phone the customer on the day of calculation so you know exactly what you are getting. 

There has been no change from the Government.     The FCA have changed some requirements but that is not the Government and there is nothing that has changed the requirements on giving the correct unit price.

I am worried that should the price prove to have fallen considerably on the day of calculation then I will be stuck with that price. 

You are worrying about something you have no control over with your current provider.   It is possible to get 20 minute delayed pricing with a more advanced option but even then its not worth worrying about.   Either transfer it to a plan that gives you live pricing or just do the transaction.

immy1

Ok thanks. The fund is WPL Legal & General Workplace Pension Plan. Not sure if that's enough details so can you let me know.