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

Marcon

hyubh said:

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)...?

Got it in one!

There are plenty of people who have been well served by an underpin which has given benefits well in excess of the pension they would otherwise have received from their occupational scheme. There is no evidence that it's created wholesale havoc.

The only people it might have 'ill served' are those who want to transfer out of their current scheme to a scheme they think they'd prefer, and now find they have to pay for advice to do so. Given that the advice may well be to stay put, and that could indeed be the better option in some cases (not all), 'ill served' may not be quite the right terminology if it stops them doing something daft.

Bostonerimus1

hyubh said:

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)...?

That's sort of my point, people have ended up in plans they don't understand and then they have to get "advice" at even more cost to get them. The blame is shared between the employee, the legislation and the employer. My worry now is that the OP is going to make a mistake that will impact their retirement and they need to take a holistic approach to their finances and how they can be best used. A starting point is to understand their finances and this pension looks like a crucial element. I read these forums and listen to shows like "money Box" on Radio 4 and the level of engagement and understanding people have regarding their pensions is depressing. The best thing for the OP is probably to find an less expensive IFA who can help.

Dazed_and_C0nfused

Bostonerimus1 said:

hyubh said:

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)...?

That's sort of my point, people have ended up in plans they don't understand and then they have to get "advice" at even more cost to get them. The blame is shared between the employee, the legislation and the employer. My worry now is that the OP is going to make a mistake that will impact their retirement and they need to take a holistic approach to their finances and how they can be best used. A starting point is to understand their finances and this pension looks like a crucial element. I read these forums and listen to shows like "money Box" on Radio 4 and the level of engagement and understanding people have regarding their pensions is depressing. The best thing for the OP is probably to find an less expensive IFA who can help.

Maybe I missed this nuance somewhere in this thread but if the op did nothing couldn't they better he pension they have long been expecting from the current scheme administrator?

Isn't the advice only "needed" because they want to deviate from that?

Bostonerimus1

Dazed_and_C0nfused said:

Bostonerimus1 said:

hyubh said:

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)...?

That's sort of my point, people have ended up in plans they don't understand and then they have to get "advice" at even more cost to get them. The blame is shared between the employee, the legislation and the employer. My worry now is that the OP is going to make a mistake that will impact their retirement and they need to take a holistic approach to their finances and how they can be best used. A starting point is to understand their finances and this pension looks like a crucial element. I read these forums and listen to shows like "money Box" on Radio 4 and the level of engagement and understanding people have regarding their pensions is depressing. The best thing for the OP is probably to find an less expensive IFA who can help.

Maybe I missed this nuance somewhere in this thread but if the op did nothing couldn't they better he pension they have long been expecting from the current scheme administrator?

Isn't the advice only "needed" because they want to deviate from that?

I think that's the case, showing that the OP really doesn't understand their pension. I bet there are many people who invest in pensions they don't really understand and given the mess of SIPPs, hybrid, contracted out etc stuff going on, who blames them.

Dazed_and_C0nfused

Bostonerimus1 said:

Dazed_and_C0nfused said:

Bostonerimus1 said:

hyubh said:

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)...?

That's sort of my point, people have ended up in plans they don't understand and then they have to get "advice" at even more cost to get them. The blame is shared between the employee, the legislation and the employer. My worry now is that the OP is going to make a mistake that will impact their retirement and they need to take a holistic approach to their finances and how they can be best used. A starting point is to understand their finances and this pension looks like a crucial element. I read these forums and listen to shows like "money Box" on Radio 4 and the level of engagement and understanding people have regarding their pensions is depressing. The best thing for the OP is probably to find an less expensive IFA who can help.

Maybe I missed this nuance somewhere in this thread but if the op did nothing couldn't they better he pension they have long been expecting from the current scheme administrator?

Isn't the advice only "needed" because they want to deviate from that?

I think that's the case, showing that the OP really doesn't understand their pension. I bet there are many people who invest in pensions they don't really understand and given the mess of SIPPs, hybrid, contracted out etc stuff going on, who blames them.

Terrible spelling in my post!  Was meant to say,

couldn't they just get the pension they have long been expecting from the current scheme administrator?

Marcon

Bostonerimus1 said:

hyubh said:

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)...?

That's sort of my point, people have ended up in plans they don't understand and then they have to get "advice" at even more cost to get them. The blame is shared between the employee, the legislation and the employer. 

What 'blame'? They don't need advice to get the pension they signed up for...

Bostonerimus1 said:

hyubh said:

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)...?

That's sort of my point, people have ended up in plans they don't understand and then they have to get "advice" at even more cost to get them. The blame is shared between the employee, the legislation and the employer. My worry now is that the OP is going to make a mistake that will impact their retirement and they need to take a holistic approach to their finances and how they can be best used. A starting point is to understand their finances and this pension looks like a crucial element. I read these forums and listen to shows like "money Box" on Radio 4 and the level of engagement and understanding people have regarding their pensions is depressing. The best thing for the OP is probably to find an less expensive IFA who can help.

...which could be exactly why they need advice, surely?

Triumph13

At the time these hybrid pensions were invented, there probably didn't seem to be much downside to them.  Then all the pension freedoms came along, allowing people to opt for drawdown, and these schemes potentially became dogs for anyone who didn't want to buy an annuity, simply because the whole industry is, quite rightly, terrified of being sued if they enable people to transfer out of any pension with a guaranteed income.

If you want to buy an annuity. then no problem.  If you want to do anything else, then the added costs of transferring out of one of these schemes will probably significantly outweigh the NI savings for a lot of people.

michael1234

Marcon said:

What 'blame'? They don't need advice to get the pension they signed up for...

In order to benefit from significant employer contributions did I have much of a choice ?

I'm a "he" by the way and my pronouns are he,him and his. Just a bit of fun as you have been one of the most helpful people on this thread so if my humour offends in any way I will apologise!

Back to the topic, mostly in order that it might help others, I plan to pop back to this thread with updates every now and again. No problem if others want to widen it to the politics but I will do my best to try and stick to my situation.

So far I'm trying to apply for a Stakeholder from StandardLife (who don't like to pick up the phone even though my call is import to them) and Aviva whose application form isn't that straight forward to a lay person but I'll get there....

watervolume

Triumph13 said:

At the time these hybrid pensions were invented, there probably didn't seem to be much downside to them.  Then all the pension freedoms came along, allowing people to opt for drawdown, and these schemes potentially became dogs for anyone who didn't want to buy an annuity, simply because the whole industry is, quite rightly, terrified of being sued if they enable people to transfer out of any pension with a guaranteed income.

If you want to buy an annuity. then no problem.  If you want to do anything else, then the added costs of transferring out of one of these schemes will probably significantly outweigh the NI savings for a lot of people.

Even buying an annuity is problematic if you don't live in the UK anymore. Since Brexit, annuity providers will no longer sell you an annuity if you are not a UK resident.

ali_bear

Just one of many cross-border benefits we've lost as a result of "taking back control"