Enhanced Tax free lump sum - Government legislation mistake

bareminerals

I turned 60 in May 24, so I started the process back in March 24, of trying to access my lump sum (normally 25% tax free) and investigating what to do with the remainder of the pot. 

I was referred to my company's financial advisors and it was stated that I had to have financial advice before going any further. There is no option to NOT take advice, it was a legal requirement for my type of pension. So after much form filling and waiting for the report which would allow me to access my own pension, I was told my pension had an enhanced tax-free amount of 37% instead of the usual 25%. Good news I thought. 

However, I was then told by the financial advisors that they could not finalise their report i.e. it has been put on hold.  Without the financial report giving me the correct advice I cannot access my pension at all. The explanation for this is that the previous government made a mistake with regards to the legislation which affects the enhanced 37% tax-free amount.  

I have now been told I have to wait until the government writes some legislation to correct their own error. Quite frankly this whole situation beggars belief. I have paid into my pension pot, and I am basically being told to be patient!  

I am told other people are in this position, so I'm asking if anyone out there is in this situation too and if we can somehow lobby the government to correct their own mistake rather more quickly than they seem to be doing. The bottom line is due to this error, I cannot retire if I wished to, as I can't access my own money!

xylophone

Is this relevant?

https://www.ftadviser.com/pensions/2024/10/08/government-finally-preparing-to-fix-lifetime-allowance-errors/

dunstonh

I was referred to my company's financial advisors and it was stated that I had to have financial advice before going any further. There is no option to NOT take advice, it was a legal requirement for my type of pension. So after much form filling and waiting for the report which would allow me to access my own pension, I was told my pension had an enhanced tax-free amount of 37% instead of the usual 25%. Good news I thought. 

enhanced tax free cash is not a safeguarded benefit and does not need financial advice.

I have now been told I have to wait until the government writes some legislation to correct their own error. Quite frankly this whole situation beggars belief. I have paid into my pension pot, and I am basically being told to be patient!  

There is some incomplete legislation that has left a small number of people in limbo. In particular those that will exceed the LSA (now or later).   

leosayer

I posted about this back in May. It's good to know the fix is finally being implemented.

https://forums.moneysavingexpert.com/discussion/6528201/lsa-and-protection-for-scheme-specific-tax-free-lump-sum

Marcon

bareminerals said:

I turned 60 in May 24, so I started the process back in March 24, of trying to access my lump sum (normally 25% tax free) and investigating what to do with the remainder of the pot. 

I was referred to my company's financial advisors and it was stated that I had to have financial advice before going any further. There is no option to NOT take advice, it was a legal requirement for my type of pension. So after much form filling and waiting for the report which would allow me to access my own pension, I was told my pension had an enhanced tax-free amount of 37% instead of the usual 25%. Good news I thought. 

However, I was then told by the financial advisors that they could not finalise their report i.e. it has been put on hold.  Without the financial report giving me the correct advice I cannot access my pension at all. The explanation for this is that the previous government made a mistake with regards to the legislation which affects the enhanced 37% tax-free amount.  

I have now been told I have to wait until the government writes some legislation to correct their own error. Quite frankly this whole situation beggars belief. I have paid into my pension pot, and I am basically being told to be patient!  

I am told other people are in this position, so I'm asking if anyone out there is in this situation too and if we can somehow lobby the government to correct their own mistake rather more quickly than they seem to be doing. The bottom line is due to this error, I cannot retire if I wished to, as I can't access my own money!

Ask them why - what 'safeguarded' benefits does your policy have? What type of pension is it?