Cash in Pension in one go for full amount

[Deleted User]

[Deleted User] said:

dunstonh said:

The financial advisor told me to deal direct with my pension company as the would not give advice to cash in all in one go and neither would any other advisors. 

I would agree with that unless you were referring to one pension out of many and it was part of tax efficient planned process.

 He also informed me that it is possible to do and I need t get the relative forms.
Could someone advise what forms I should be asking for.  My pension company are not that helpful and I need to do by the end of this financial year. 

All providers that cater for full UFPLS will do it, but their processes are provider-specific.  Some will do it online. Some will have forms.  Some will do it over the phone.

Even though they clearly offer a lump sum on the letter, they are not happy to release.

They are neither happy or unhappy.  They don't think that way.
If they offer UFPLS and you do not have safeguarded benefits then they will do it.

HOWEVER....

I was informed by my pension company that I need to get financial advice.

....that suggests you have safeguarded benefits on a pension over £30,000 in value.    If that is the case, you would need advice from an IFA to carry out the transaction.      If you had no safeguarded benefits, then advice is not required and they would do it.

What safeguarded benefits do you have?
if its a guaranteed annuity rate (GAR) then most IFA firms can advise you (most FA firms cannot).
If its GMP or another safeguarded benefit then you are looking at closer to 1 in 10 advisers able to advise you.

Overriding a safeguarded benefit is a very high risk transaction.  And you want 100% UFPLS which is a very high risk transaction.     Put the two together and you have an extremely high risk transaction, which is way most advisers will want to steer clear of it.

What are the safeguarded benefits you have?
what is the fund value?

edit added:    And just to confirm, this is a defined contribution pension and not a defined benefit scheme?  

Thank you for the advice, it is a GAR.  I would say its a defined contribution pension, as I have always paid a monthly amount, the value is approxima

[Deleted User] said:

dunstonh said:

The financial advisor told me to deal direct with my pension company as the would not give advice to cash in all in one go and neither would any other advisors. 

I would agree with that unless you were referring to one pension out of many and it was part of tax efficient planned process.

 He also informed me that it is possible to do and I need t get the relative forms.
Could someone advise what forms I should be asking for.  My pension company are not that helpful and I need to do by the end of this financial year. 

All providers that cater for full UFPLS will do it, but their processes are provider-specific.  Some will do it online. Some will have forms.  Some will do it over the phone.

Even though they clearly offer a lump sum on the letter, they are not happy to release.

They are neither happy or unhappy.  They don't think that way.
If they offer UFPLS and you do not have safeguarded benefits then they will do it.

HOWEVER....

I was informed by my pension company that I need to get financial advice.

....that suggests you have safeguarded benefits on a pension over £30,000 in value.    If that is the case, you would need advice from an IFA to carry out the transaction.      If you had no safeguarded benefits, then advice is not required and they would do it.

What safeguarded benefits do you have?
if its a guaranteed annuity rate (GAR) then most IFA firms can advise you (most FA firms cannot).
If its GMP or another safeguarded benefit then you are looking at closer to 1 in 10 advisers able to advise you.

Overriding a safeguarded benefit is a very high risk transaction.  And you want 100% UFPLS which is a very high risk transaction.     Put the two together and you have an extremely high risk transaction, which is way most advisers will want to steer clear of it.

What are the safeguarded benefits you have?
what is the fund value?

edit added:    And just to confirm, this is a defined contribution pension and not a defined benefit scheme?  

Thank you for the advice, it is a GAR.  I would say its a defined contribution pension, as I have always paid a monthly amount, the value is approxima

Sorry - the value is approximate £300,000.00. The pension company are insisting I get financial advice confirmation form signed.  Even though no Financial advisor to date will agree to do this, due to me taking the option of a one lump cash payment.  Frustrating that I cannot access my money.  I understand the tax implications. 

Report

bjorn_toby_wilde

I don’t want to pry but is there no other way you can raise the money you need? That’s one hell of a tax bill.

Albermarle

[Deleted User] said:

[Deleted User] said:

dunstonh said:

The financial advisor told me to deal direct with my pension company as the would not give advice to cash in all in one go and neither would any other advisors. 

I would agree with that unless you were referring to one pension out of many and it was part of tax efficient planned process.

 He also informed me that it is possible to do and I need t get the relative forms.
Could someone advise what forms I should be asking for.  My pension company are not that helpful and I need to do by the end of this financial year. 

All providers that cater for full UFPLS will do it, but their processes are provider-specific.  Some will do it online. Some will have forms.  Some will do it over the phone.

Even though they clearly offer a lump sum on the letter, they are not happy to release.

They are neither happy or unhappy.  They don't think that way.
If they offer UFPLS and you do not have safeguarded benefits then they will do it.

HOWEVER....

I was informed by my pension company that I need to get financial advice.

....that suggests you have safeguarded benefits on a pension over £30,000 in value.    If that is the case, you would need advice from an IFA to carry out the transaction.      If you had no safeguarded benefits, then advice is not required and they would do it.

What safeguarded benefits do you have?
if its a guaranteed annuity rate (GAR) then most IFA firms can advise you (most FA firms cannot).
If its GMP or another safeguarded benefit then you are looking at closer to 1 in 10 advisers able to advise you.

Overriding a safeguarded benefit is a very high risk transaction.  And you want 100% UFPLS which is a very high risk transaction.     Put the two together and you have an extremely high risk transaction, which is way most advisers will want to steer clear of it.

What are the safeguarded benefits you have?
what is the fund value?

edit added:    And just to confirm, this is a defined contribution pension and not a defined benefit scheme?  

Thank you for the advice, it is a GAR.  I would say its a defined contribution pension, as I have always paid a monthly amount, the value is approxima

[Deleted User] said:

dunstonh said:

The financial advisor told me to deal direct with my pension company as the would not give advice to cash in all in one go and neither would any other advisors. 

I would agree with that unless you were referring to one pension out of many and it was part of tax efficient planned process.

 He also informed me that it is possible to do and I need t get the relative forms.
Could someone advise what forms I should be asking for.  My pension company are not that helpful and I need to do by the end of this financial year. 

All providers that cater for full UFPLS will do it, but their processes are provider-specific.  Some will do it online. Some will have forms.  Some will do it over the phone.

Even though they clearly offer a lump sum on the letter, they are not happy to release.

They are neither happy or unhappy.  They don't think that way.
If they offer UFPLS and you do not have safeguarded benefits then they will do it.

HOWEVER....

I was informed by my pension company that I need to get financial advice.

....that suggests you have safeguarded benefits on a pension over £30,000 in value.    If that is the case, you would need advice from an IFA to carry out the transaction.      If you had no safeguarded benefits, then advice is not required and they would do it.

What safeguarded benefits do you have?
if its a guaranteed annuity rate (GAR) then most IFA firms can advise you (most FA firms cannot).
If its GMP or another safeguarded benefit then you are looking at closer to 1 in 10 advisers able to advise you.

Overriding a safeguarded benefit is a very high risk transaction.  And you want 100% UFPLS which is a very high risk transaction.     Put the two together and you have an extremely high risk transaction, which is way most advisers will want to steer clear of it.

What are the safeguarded benefits you have?
what is the fund value?

edit added:    And just to confirm, this is a defined contribution pension and not a defined benefit scheme?  

Thank you for the advice, it is a GAR.  I would say its a defined contribution pension, as I have always paid a monthly amount, the value is approxima

Sorry - the value is approximate £300,000.00. The pension company are insisting I get financial advice confirmation form signed.  Even though no Financial advisor to date will agree to do this, due to me taking the option of a one lump cash payment.  Frustrating that I cannot access my money.  I understand the tax implications. 

Report

The rules are in place to stop people doing something daft, and then complaining afterwards they did not understand/nobody warned them.
So you will just have to find the best way to live within the rules.

Silvertabby

You say that you are aware of the tax implications of taking a £300K pension pot as a one-off payment - but are you sure?  Or have you made (wrong) assumptions. ie, that the taxable element will be taxed at your current/usual 20% rate?

jimjames

[Deleted User] said:

[Deleted User] said:

dunstonh said:

The financial advisor told me to deal direct with my pension company as the would not give advice to cash in all in one go and neither would any other advisors. 

I would agree with that unless you were referring to one pension out of many and it was part of tax efficient planned process.

 He also informed me that it is possible to do and I need t get the relative forms.
Could someone advise what forms I should be asking for.  My pension company are not that helpful and I need to do by the end of this financial year. 

All providers that cater for full UFPLS will do it, but their processes are provider-specific.  Some will do it online. Some will have forms.  Some will do it over the phone.

Even though they clearly offer a lump sum on the letter, they are not happy to release.

They are neither happy or unhappy.  They don't think that way.
If they offer UFPLS and you do not have safeguarded benefits then they will do it.

HOWEVER....

I was informed by my pension company that I need to get financial advice.

....that suggests you have safeguarded benefits on a pension over £30,000 in value.    If that is the case, you would need advice from an IFA to carry out the transaction.      If you had no safeguarded benefits, then advice is not required and they would do it.

What safeguarded benefits do you have?
if its a guaranteed annuity rate (GAR) then most IFA firms can advise you (most FA firms cannot).
If its GMP or another safeguarded benefit then you are looking at closer to 1 in 10 advisers able to advise you.

Overriding a safeguarded benefit is a very high risk transaction.  And you want 100% UFPLS which is a very high risk transaction.     Put the two together and you have an extremely high risk transaction, which is way most advisers will want to steer clear of it.

What are the safeguarded benefits you have?
what is the fund value?

edit added:    And just to confirm, this is a defined contribution pension and not a defined benefit scheme?  

Thank you for the advice, it is a GAR.  I would say its a defined contribution pension, as I have always paid a monthly amount, the value is approxima

[Deleted User] said:

dunstonh said:

The financial advisor told me to deal direct with my pension company as the would not give advice to cash in all in one go and neither would any other advisors. 

I would agree with that unless you were referring to one pension out of many and it was part of tax efficient planned process.

 He also informed me that it is possible to do and I need t get the relative forms.
Could someone advise what forms I should be asking for.  My pension company are not that helpful and I need to do by the end of this financial year. 

All providers that cater for full UFPLS will do it, but their processes are provider-specific.  Some will do it online. Some will have forms.  Some will do it over the phone.

Even though they clearly offer a lump sum on the letter, they are not happy to release.

They are neither happy or unhappy.  They don't think that way.
If they offer UFPLS and you do not have safeguarded benefits then they will do it.

HOWEVER....

I was informed by my pension company that I need to get financial advice.

....that suggests you have safeguarded benefits on a pension over £30,000 in value.    If that is the case, you would need advice from an IFA to carry out the transaction.      If you had no safeguarded benefits, then advice is not required and they would do it.

What safeguarded benefits do you have?
if its a guaranteed annuity rate (GAR) then most IFA firms can advise you (most FA firms cannot).
If its GMP or another safeguarded benefit then you are looking at closer to 1 in 10 advisers able to advise you.

Overriding a safeguarded benefit is a very high risk transaction.  And you want 100% UFPLS which is a very high risk transaction.     Put the two together and you have an extremely high risk transaction, which is way most advisers will want to steer clear of it.

What are the safeguarded benefits you have?
what is the fund value?

edit added:    And just to confirm, this is a defined contribution pension and not a defined benefit scheme?  

Thank you for the advice, it is a GAR.  I would say its a defined contribution pension, as I have always paid a monthly amount, the value is approxima

 I understand the tax implications. 

Out of interest it seems mad to throw away almost half of your pension, what's the reason for needing to do that?

Cobbler_tone

Trying to keep Reeves in a job?

DRS1

Do you know what rate the GAR is set at?  And does it cover all of the £300,000?  I am wondering if you can do a partial transfer of the part of the pot which does not have the GAR attached and then try to take the non GAR pot all at once?  The same "mad from a tax point of view" considerations would apply but the GAR element would be out of the picture.

The GAR will only apply if you take your benefits from your selected retirement age - how far away is that?

dunstonh

 it is a GAR. 
<snip>
the value is approximate £300,000.00.

That makes it a defined contriubtion plan with a safeguarded benefit.   It cannot be cashed in without an adviser.

Even though no Financial advisor to date will agree to do this, due to me taking the option of a one lump cash payment.  Frustrating that I cannot access my money.  I understand the tax implications.

You have two issues here regarding the advice.

Overring a GAR is a high risk transaction for an adviser.   If they do this, the adviser firm has to report the transaction each year on their PI proposal forever more.  Not just a number but a summary of the transaction.    The PI insurer will increase the premium to reflect that risk each and every year going forward.   

Cashing in a pension is considered a bad thing to do without justification.   The justification for cashing in £300k and losing half of it in tax is going to have to be spectacularly good.

Put those two things together and you have an adviser's nightmare.  Most GARs are valuable and worth using.  Only a very small number are not.

QrizB

jimjames said:

[Deleted User] said:

 I understand the tax implications.

Out of interest it seems mad to throw away almost half of your pension, what's the reason for needing to do that?

We seem to have had a lot of posters wanting to pay Additional Rate tax recently (and one or two accidentally having to do so). Wonder if it's a result of them not fully understanding the changes to IHT? Professional advice might well be an excellent idea in such circumstances.

artyboy

QrizB said:

jimjames said:

[Deleted User] said:

 I understand the tax implications.

Out of interest it seems mad to throw away almost half of your pension, what's the reason for needing to do that?

We seem to have had a lot of posters wanting to pay Additional Rate tax recently (and one or two accidentally having to do so). Wonder if it's a result of them not fully understanding the changes to IHT? Professional advice might well be an excellent idea in such circumstances.

You may well have nailed it. In the OP's case, £62.5 k a year for 5 ish years, and it's all done with about 15% overall tax paid, assuming tax free element intact and no other income.

£300k in one go is madness, unless it's to pay off a nasty loan shark or something (in which case it's a different form of madness)