Small Section 32 Policy with Enhanced Tax Free Lump Sum but no GMP to FlexiAccess?

Shylock

Anyway of doing this on a "non advised" basis?

I know it would mean sacrificing the tax free enhancement but as a basic rate taxpayer that's only going to cost me £640 (20% of 25% v. 20% of 33% on £40k "pot") and the only way of enjoying the enhanced cash amount is to take out an annuity, which I don't want to do.

Any ideas how I may go about this DIY?  I already have two other Flexi Access DrawDown Schemes which I'd hoped I'd be able to transfer this scheme into, but "no go" say the providers.  They'll accept "Transfer In" of Section 32 schemes but, to "protect me" from wasting this £640 they are insisting I employ the services of an FCA registered Financial Advisor, which seems a bit OTT for such a small amount.

dunstonh

Enhanced tax free cash is not a safeguarded benefit and does not require a financial adviser. 
However, a small number of schemes may not accept it as a business decision to protect themselves. 

Because the FCA likes consistency and written rules on processes, if a company decides not to accept protected tax free cash, then it will stick with that.  If they start going into areas of advice as to whether it is a valuable benefit or not, then they may need advice permissions and run the risk of staff making errors.  

Shylock

dunstonh said:

Enhanced tax free cash is not a safeguarded benefit and does not require a financial adviser. 
However, a small number of schemes may not accept it as a business decision to protect themselves. 

Because the FCA likes consistency and written rules on processes, if a company decides not to accept protected tax free cash, then it will stick with that.  If they start going into areas of advice as to whether it is a valuable benefit or not, then they may need advice permissions and run the risk of staff making errors.  

Thanks for the response.

My two existing Draw Down schemes are with Royal London and Fidelity, and both have said they'd require a financial adviser to sign off the transfer.
Is there anyone you'd suggest I try next?

Marcon

Open a stakeholder pension and transfer to that. You can open it your yourself at no cost, and arrange the transfer yourself at no cost. Stakeholder pensions have to accept transfers from any UK registered pension scheme. See https://forums.moneysavingexpert.com/discussion/comment/81094050#Comment_81094050?utm_source=community-search&utm_medium=organic-search&utm_term=stakeholder+pension

xylophone

Are you saying that there are no safeguarded benefits at all?

https://www.gov.uk/government/publications/pension-benefits-with-a-guarantee-and-the-advice-requirement/pension-benefits-with-a-guarantee-and-the-advice-requirement

4.3 Scheme specific protected tax-free lump sums

Members who had a right to more than 25% tax-free cash on 6 April 2006 may still have their tax-free cash entitlement protected. However, as this relates to a lump sum rather than a secure retirement income, it does not constitute a safeguarded benefit, provided that there are no other safeguarded benefits attached to the policy.

If so, you don't need an adviser to transfer elsewhere?  It is just your current providers stipulating advice to transfer to their

particular schemes?

A stakeholder pension must accept the transfer of any registered pension scheme.

If you are unconcerned about the loss of the EPCLS, perhaps it would be possible to open a stakeholder on a DIY basis with Standard Life or Aviva, transfer in the S32 and then transfer the stakeholder to Fidelity (as RL might prove sticky whatever you do)? 

Shylock

xylophone said:

Are you saying that there are no safeguarded benefits at all?

https://www.gov.uk/government/publications/pension-benefits-with-a-guarantee-and-the-advice-requirement/pension-benefits-with-a-guarantee-and-the-advice-requirement

4.3 Scheme specific protected tax-free lump sums

Members who had a right to more than 25% tax-free cash on 6 April 2006 may still have their tax-free cash entitlement protected. However, as this relates to a lump sum rather than a secure retirement income, it does not constitute a safeguarded benefit, provided that there are no other safeguarded benefits attached to the policy.

If so, you don't need an adviser to transfer elsewhere?  It is just your current providers stipulating advice to transfer to their

particular schemes?

A stakeholder pension must accept the transfer of any registered pension scheme.

If you are unconcerned about the loss of the EPCLS, perhaps it would be possible to open a stakeholder on a DIY basis with Standard Life or Aviva, transfer in the S32 and then transfer the stakeholder to Fidelity (as RL might prove sticky whatever you do)? 

Wow!  Reading some of those links that looked like a whole world of pain!  Mind you, the original poster had a lot more at stake than me so understandably worth the effort.

From their comments just opening a Stakeholder Pension to accept the Transfer In is likely to be less than straightforward.

I'm currently trying again with Fidelity and making the point that, as dunstunh says above, the EPCL is not a safeguarded benefit so shouldnt be an issue for them.  Appreciate they can have their own rules, but thought it wort a try.

dunstonh

I'm currently trying again with Fidelity and making the point that, as dunstunh says above, the EPCL is not a safeguarded benefit so shouldnt be an issue for them.  Appreciate they can have their own rules, but thought it wort a try.

It may be worth trying a provider that is fully direct to client focused.  Fidelity and Royal London are both focused on intermediaries.  Fidelity does have a direct to consumer offering but its secondary.   Whereas there are many that only have a direct to consumer offering and may be more flexible.