Pension Advisor would want £21,000 for a failed transfer

xylophone

Only two stakeholders (apparently) generally available?

https://www.koody.co/pensions/stakeholder-pension.

and although above directs to Aviva site, Aviva don't seem to be actively promoting it?


https://static.aviva.io/content/dam/document-library/adviser/pensions/sp01006.pdf

https://static.aviva.io/content/dam/document-library/adviser/pensions/sp01040c.pdf


https://www.standardlife.co.uk/pensions/stakeholder-pension

Marcon

Triumph13 said:

dunstonh said:

I'm not sure exactly what the rules are in this situation, and how much comes down to how the scheme is worded and how helpful your employer is, but I can share my own experience as a member of a similar scheme, although with a larger legacy DB component. 

If the DC element has a final salary underpin, then it is a safeguarded benefit and requires a PTS to give advice.   Any segment that has no underpin or safeguarded benefit is free to be transferred without advice.   The £30k rule would also apply if there is an underpin.

I think my scheme must have had some very crafty wording in it.  They managed to structure it in such a way that the underpin only came into existence if certain conditions were met.  As they weren't met, I could transfer without advice.  From memory I had >£200k in this section.  I was very surprised myself at the time.  Not much help to OP though!

OP, if your pension doesn't allow partial transfers, then it looks like your only sensible route if you are sure you want to transfer would be the stakeholder pension one.  Whilst second guessing the budget is not generally a sensible idea, in your case I would be very tempted indeed to just quickly open a stakeholder pension with a minimal contribution (£100?) as that would be a very minimal downside risk.

£16 is all that's needed!

michael1234

I will try to open either the SL or Aviva Stakeholder.

Just so I understand, is the Full Advice needed by the stakeholder or by my existing hybrid pension or both? I was looking back at some emails from them and they (my existing pension) seem to suggest it would be the receiving pension that would require the Full Advice.

Either way, I would plan to open the stakeholder _without_ starting a transfer as would do that later when I have an IFA in place.

Marcon

michael1234 said:

I will try to open either the SL or Aviva Stakeholder.

Just so I understand, is the Full Advice needed by the stakeholder or by my existing hybrid pension or both? I was looking back at some emails from them and they (my existing pension) seem to suggest it would be the receiving pension that would require the Full Advice.

Either way, I would plan to open the stakeholder _without_ starting a transfer as would do that later when I have an IFA in place.

Full advice is mandatory/needed by the scheme paying out the transfer where the scheme has safeguarded benefits, the value of the transfer exceeds £30,000 and the transfer is to a scheme which allows 'flexible access' to benefits.

The receiving scheme (if non-stakeholder) may also require evidence that you've taken advice and can set their own rules. Some SIPPs won't accept transfers from a DB scheme of ANY value (ie even under £30K) without evidence that the adviser had confirmed it was in your interests to transfer.

A stakeholder scheme may require you to demonstrate that you've received advice where advice is mandatory (see my opening sentence), but won't need to see it or know what it says; they have to accept the transfer. 

wjr4

michael1234 said:

Starting to think I need to pay an hourly rate for someone to read my current pension (3 pages I think) and give highly informal advice on how I could proceed. Would I be laughed out the door if I thought a few hundred quid might be enough? Maybe abridged advice might give me that kind of insight?

Yes, you will be laughed out the door if you think anyone will give you advice for a few hundred quid. Look into abridged advice instead. You just need to call companies and see if they have a ‘pension transfer specialist’. Make sure they provide a full financial plan, and do not just concentrate on the pension. This should include cashflow models. 

michael1234

wjr4 said:

michael1234 said:

Starting to think I need to pay an hourly rate for someone to read my current pension (3 pages I think) and give highly informal advice on how I could proceed. Would I be laughed out the door if I thought a few hundred quid might be enough? Maybe abridged advice might give me that kind of insight?

Yes, you will be laughed out the door if you think anyone will give you advice for a few hundred quid. Look into abridged advice instead. You just need to call companies and see if they have a ‘pension transfer specialist’. Make sure they provide a full financial plan, and do not just concentrate on the pension. This should include cashflow models. 

But what if I just want to know how much my hybrid pension is going to pay me if I cash it out now ?

Marcon

wjr4 said:

michael1234 said:

Starting to think I need to pay an hourly rate for someone to read my current pension (3 pages I think) and give highly informal advice on how I could proceed. Would I be laughed out the door if I thought a few hundred quid might be enough? Maybe abridged advice might give me that kind of insight?

Yes, you will be laughed out the door if you think anyone will give you advice for a few hundred quid. Look into abridged advice instead. You just need to call companies and see if they have a ‘pension transfer specialist’. Make sure they provide a full financial plan, and do not just concentrate on the pension. This should include cashflow models. 

Given how few companies have the necessary permissions, that could be a bit frustrating.

OP - see https://www.fca.org.uk/consumers/pension-transfer-advice-what-expect The FCA register will tell you at a glance if the firm has the necessary permission to advise on pension transfers. 

Marcon

michael1234 said:

wjr4 said:

michael1234 said:

Starting to think I need to pay an hourly rate for someone to read my current pension (3 pages I think) and give highly informal advice on how I could proceed. Would I be laughed out the door if I thought a few hundred quid might be enough? Maybe abridged advice might give me that kind of insight?

Yes, you will be laughed out the door if you think anyone will give you advice for a few hundred quid. Look into abridged advice instead. You just need to call companies and see if they have a ‘pension transfer specialist’. Make sure they provide a full financial plan, and do not just concentrate on the pension. This should include cashflow models. 

But what if I just want to know how much my hybrid pension is going to pay me if I cash it out now ?

In a post you made in April 2022, you included the following:

The transfer value is based on a Defined Benefit underpin and money purchase fund. If the defined benefit underpin calculation (which is the guaranteed part of the transfer value) is higher than the DC fund, then the DB guaranteed underpin element becomes the total transfer value payable and a shortfall is then added to the DC fund. However, if the DB underpin is less than the DC fund then the DC fund is the transfer value but has a guaranteed underpin part.

So the adviser won't be able to tell you the transfer value. Only the scheme administrators will be able to supply that information.

Have you thought about a free appointment with PensionWise? https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise 

They can't give financial advice, but as you have some DC benefits, they can give you help to understand what you've got/your options.

Bostonerimus1

I think this thread just shows that the whole "contracting out" idea and the complexities of the pension system that it produced has ill served some people. The whole "circus" of advisors required to transfer to a SIPP and the costs involved is a pretty depressing way to cover all the issues inherent with this scheme and the "hybrid" approach strikes me as the worst of both worlds for the employee; ie risk during accumulation and inflexibility when you want to get at your money.

hyubh

Bostonerimus1 said:

I think this thread just shows that the whole "contracting out" idea and the complexities of the pension system that it produced has ill served some people. The whole "circus" of advisors required to transfer to a SIPP and the costs involved is a pretty depressing way to cover all the issues inherent with this scheme and the "hybrid" approach strikes me as the worst of both worlds for the employee; ie risk during accumulation and inflexibility when you want to get at your money.

Surely the 'issue' comes from the OP wanting to exercise options that didn't exist when the pension scheme was designed (i.e. 2015 'pension freedoms'), combined with the fact the DC fund has clearly outpaced the RST underpin (which wasn't necessarily a given)...?