DB Transfer 'extortion' ?!

Dazed_and_C0nfused

MarkTorquay said:

Well... We (my wife & I) have started on the road of withdrawing the full amount that is sat in her NatWest Group Pension from working there in the 1980's. Note: I have already done this process for 3 old pensions I tracked down and fully withdrew my funds in all 3 (they were under £30k so all good).
We went through the process of first finding this (!) and, having found it, have now got the Balance/Quote of around £50,000.
The fund it's currently sat in does not allow full withdrawal so we were looking at transferring to another fund that does...

...Anyways - We have discovered that:

• We are "legally obliged" to seek advice from an FCA Regulated Pension Advisor
• Many advisors simply won't 'take on' a Defined Benefits full withdrawal
• IF we find one that does, we have to start a potentially lengthy and costly process
• That process will 99.99% result in the Advisor advising NOT to fully wihdraw funds
• Some advisors (whittling this down again!) MAY offer a 'Customer Override' process whereby "if the customer (my wife) acknowledges that the advice is to not withdraw however the customer states that they understand this but still want to go ahead", they may be able to start a new process for that"

I am now very incredulous/frustrated (nay annoyed !) that the above is required !

We have been told over the 'phone that "the cost will be a minium of £4,000" (!!!!)

Is this not our money (well - her money but we are a team!) ?

I feel this is either extortion or theft or blackmail or indeed, all 3 !!!

We already know that we will override any advice - why should we have to go through this pain and expense to get to our own decision to get at our own monies !?

Any advice from anybody on this would be HUGELY appreciated...

Many thanks,

Jackie & Mark

There is nothing "sat" in her pension.

As this is a defined benefit pension she has an entitlement to £x/year based on the scheme rules.  And possibly a (tax free) PCLS.  And the pension will have some element of inflation protection.

The £50,000 (if still the valid figure) is what NatWest Group are willing to pay to avoid having to pay her that pension from the schemes normal pension nage for the rest of her life.  Potentially 40+ years.

Given you haven't said what her actual pension entitlement is (the revalued amount, not what it was when she became a deferred member of the scheme) it's impossible to say if £50,000 is even worth considering.

dunstonh

We went through the process of first finding this (!) and, having found it, have now got the Balance/Quote of around £50,000.

2 years ago, that would have been over £100,000.

I am now very incredulous/frustrated (nay annoyed !) that the above is required !

A DB transfer is only suitable in around 1 in 10 cases.   Its extremely high risk and specialist. 
That is the first issue.
Then you want to do another very high risk transaction by cashing it all in. 

What you want to do is unlikely to be financially suitable and hardly any IFAs are going to be interested in facilitating it.

We have been told over the 'phone that "the cost will be a minium of £4,000" (!!!!)

For what you want to do, £4000 seems cheap.

Is this not our money (well - her money but we are a team!) ?

No.  Your wife has a pension with defined benefits. There is no pot.   What you are asking to do is give up those valuable benefits to turn it into a pot.

I feel this is either extortion or theft or blackmail or indeed, all 3 !!!

Or lets look at it differently.   We know that only 1 in 10 are suitable for DB transfers.  Why do you think this transaction is in the 1 in 10 and not the 9 in 10?

WoodForTheTrees123

DRS1 said:

MarkTorquay said:

Marcon said:

MarkTorquay said:

Well... We (my wife & I) have started on the road of withdrawing the full amount that is sat in her NatWest Group Pension from working there in the 1980's. Note: I have already done this process for 3 old pensions I tracked down and fully withdrew my funds in all 3 (they were under £30k so all good).
We went through the process of first finding this (!) and, having found it, have now got the Balance/Quote of around £50,000.
The fund it's currently sat in does not allow full withdrawal so we were looking at transferring to another fund that does...

...Anyways - We have discovered that:

• We are "legally obliged" to seek advice from an FCA Regulated Pension Advisor
• Many advisors simply won't 'take on' a Defined Benefits full withdrawal
• IF we find one that does, we have to start a potentially lengthy and costly process
• That process will 99.99% result in the Advisor advising NOT to fully wihdraw funds
• Some advisors (whittling this down again!) MAY offer a 'Customer Override' process whereby "if the customer (my wife) acknowledges that the advice is to not withdraw however the customer states that they understand this but still want to go ahead", they may be able to start a new process for that"

I am now very incredulous/frustrated (nay annoyed !) that the above is required !

We have been told over the 'phone that "the cost will be a minium of £4,000" (!!!!)

Is this not our money (well - her money but we are a team!) ?

I feel this is either extortion or theft or blackmail or indeed, all 3 !!!

We already know that we will override any advice - why should we have to go through this pain and expense to get to our own decision to get at our own monies !?

Any advice from anybody on this would be HUGELY appreciated...

Many thanks,

Jackie & Mark

Endless threads on this forum on just this topic. Have a browse.

No good being frustrated or annoyed - it's a legal requirement, which is why you have to 'go through it'.

Once your wife has confirmation that she has received the required advice (and the adviser must provide the required certificate if she has received the requisite 'full' advice), she can arrange her own transfer to a stakeholder pension (some still open for new retail business), which must accept a transfer from any UK registered pension scheme. She'll still need advice before the ceding (paying) scheme can pay over the transfer.

Thanks Marcon - I suppose what I'm saying here is the whole point this being "a legal requirement" - I'm kinda challenging the law itself I suppose whereby, to be legally forced to fork out money/effort/time, to end up at our own 'grown up' decision is quite frankly unbelievable !? Again - it's our money - who's to judge or decide what we want to do with it ?

Part of the point is to stop you or your wife making a decision which most people on this board will tell you is not the best decision.  Some of us are quite jealous of someone with a DB pension and shake our heads at someone who wants to give it up.

Now obviously we don't know your wife's circumstances and maybe she is in the 20% (is it really that high?) for whom the decision will be OK.  But it is a valuable right she would be giving up and too often people don't understand how valuable.  So yes the nanny state tries to stop them doing something that is most probably not a good idea for them.

And do not forget that there have been scams - "pension liberation" rings a bell where people have tried to take their pensions out only to find themselves robbed of the pension by some "adviser" (who is not authorised or regulated) and then hit with a bill from the taxman for "taking their money out of the pension".

Hi DRS1 - That's very nicely and succinctly put - I do understand your points and am gleaning the general concensus of "don't do it". I will say however that I could list at least 20 bullet points of perhaps why we would withdraw - all personal points but very well considered... Thanks again

Dazed_and_C0nfused

MarkTorquay said:

DRS1 said:

MarkTorquay said:

Marcon said:

MarkTorquay said:

Well... We (my wife & I) have started on the road of withdrawing the full amount that is sat in her NatWest Group Pension from working there in the 1980's. Note: I have already done this process for 3 old pensions I tracked down and fully withdrew my funds in all 3 (they were under £30k so all good).
We went through the process of first finding this (!) and, having found it, have now got the Balance/Quote of around £50,000.
The fund it's currently sat in does not allow full withdrawal so we were looking at transferring to another fund that does...

...Anyways - We have discovered that:

• We are "legally obliged" to seek advice from an FCA Regulated Pension Advisor
• Many advisors simply won't 'take on' a Defined Benefits full withdrawal
• IF we find one that does, we have to start a potentially lengthy and costly process
• That process will 99.99% result in the Advisor advising NOT to fully wihdraw funds
• Some advisors (whittling this down again!) MAY offer a 'Customer Override' process whereby "if the customer (my wife) acknowledges that the advice is to not withdraw however the customer states that they understand this but still want to go ahead", they may be able to start a new process for that"

I am now very incredulous/frustrated (nay annoyed !) that the above is required !

We have been told over the 'phone that "the cost will be a minium of £4,000" (!!!!)

Is this not our money (well - her money but we are a team!) ?

I feel this is either extortion or theft or blackmail or indeed, all 3 !!!

We already know that we will override any advice - why should we have to go through this pain and expense to get to our own decision to get at our own monies !?

Any advice from anybody on this would be HUGELY appreciated...

Many thanks,

Jackie & Mark

Endless threads on this forum on just this topic. Have a browse.

No good being frustrated or annoyed - it's a legal requirement, which is why you have to 'go through it'.

Once your wife has confirmation that she has received the required advice (and the adviser must provide the required certificate if she has received the requisite 'full' advice), she can arrange her own transfer to a stakeholder pension (some still open for new retail business), which must accept a transfer from any UK registered pension scheme. She'll still need advice before the ceding (paying) scheme can pay over the transfer.

Thanks Marcon - I suppose what I'm saying here is the whole point this being "a legal requirement" - I'm kinda challenging the law itself I suppose whereby, to be legally forced to fork out money/effort/time, to end up at our own 'grown up' decision is quite frankly unbelievable !? Again - it's our money - who's to judge or decide what we want to do with it ?

Part of the point is to stop you or your wife making a decision which most people on this board will tell you is not the best decision.  Some of us are quite jealous of someone with a DB pension and shake our heads at someone who wants to give it up.

Now obviously we don't know your wife's circumstances and maybe she is in the 20% (is it really that high?) for whom the decision will be OK.  But it is a valuable right she would be giving up and too often people don't understand how valuable.  So yes the nanny state tries to stop them doing something that is most probably not a good idea for them.

And do not forget that there have been scams - "pension liberation" rings a bell where people have tried to take their pensions out only to find themselves robbed of the pension by some "adviser" (who is not authorised or regulated) and then hit with a bill from the taxman for "taking their money out of the pension".

Hi DRS1 - That's very nicely and succinctly put - I do understand your points and am gleaning the general concensus of "don't do it". I will say however that I could list at least 20 bullet points of perhaps why we would withdraw - all personal points but very well considered... Thanks again

The fact that you have used the phrase "why we would withdraw" suggests you still don't fully understand the type of pension your wife has.

Marcon

MarkTorquay said:

Marcon said:

MarkTorquay said:

Hi Hoenir - Not sure - I'll see if it's on the Pension Portal and/or the documents and will let you know ...

Which is precisely why advice is a requirement - to stop people making blind decisions based on little or no understanding of what they are giving up (and then trying to find someone to blame!).

Wow "to stop people making blind decisions based on little or no understanding of what they are giving up" - I had not realised that anybody is aware of our personal circumstances - Just throw a blanket over "the right decision", bound to fit everybody.... And to go through the whole process to end up with our override, because we know and understand (only us to blame!) what we want to do and why - is that not farcical ?

Your adviser is required to ensure they are, and give advice on that basis.

If your wife chooses to disregard it, so be it - but based on your first and second posts on this thread, you've already made your decision without understanding what the scheme offers, so might perhaps take note of any advice she receives before summarily dismissing it.

QrizB

MarkTorquay said:

it's our money - who's to judge or decide what we want to do with it ?

The government are, the ones who made the law that requires you to take regulated advice before embarking on a financial transaction that might, potentially, impoverish you in retirement and require payment of benefits from the public purse.
Your advisor will look at your full financial situation and will advise whether this transfer is in your best interests, or not. If it's as clear cut as you think eg. you've both got other pensions and investments that will let you live a comfortable life indefinitely, the recommendation is likely to be favourable.

daveyjp

The principle question is 'why does your wife want to cash in a valuable pension'?

There are probably ways of achieving her end goal whilst keeping the DB in payment and that would be the focus of the effort, not trying to rage against the law makers as you waste a lost of energy on a futile endeavour.

DRS1

MarkTorquay said:

DRS1 said:

MarkTorquay said:

Marcon said:

MarkTorquay said:

Well... We (my wife & I) have started on the road of withdrawing the full amount that is sat in her NatWest Group Pension from working there in the 1980's. Note: I have already done this process for 3 old pensions I tracked down and fully withdrew my funds in all 3 (they were under £30k so all good).
We went through the process of first finding this (!) and, having found it, have now got the Balance/Quote of around £50,000.
The fund it's currently sat in does not allow full withdrawal so we were looking at transferring to another fund that does...

...Anyways - We have discovered that:

• We are "legally obliged" to seek advice from an FCA Regulated Pension Advisor
• Many advisors simply won't 'take on' a Defined Benefits full withdrawal
• IF we find one that does, we have to start a potentially lengthy and costly process
• That process will 99.99% result in the Advisor advising NOT to fully wihdraw funds
• Some advisors (whittling this down again!) MAY offer a 'Customer Override' process whereby "if the customer (my wife) acknowledges that the advice is to not withdraw however the customer states that they understand this but still want to go ahead", they may be able to start a new process for that"

I am now very incredulous/frustrated (nay annoyed !) that the above is required !

We have been told over the 'phone that "the cost will be a minium of £4,000" (!!!!)

Is this not our money (well - her money but we are a team!) ?

I feel this is either extortion or theft or blackmail or indeed, all 3 !!!

We already know that we will override any advice - why should we have to go through this pain and expense to get to our own decision to get at our own monies !?

Any advice from anybody on this would be HUGELY appreciated...

Many thanks,

Jackie & Mark

Endless threads on this forum on just this topic. Have a browse.

No good being frustrated or annoyed - it's a legal requirement, which is why you have to 'go through it'.

Once your wife has confirmation that she has received the required advice (and the adviser must provide the required certificate if she has received the requisite 'full' advice), she can arrange her own transfer to a stakeholder pension (some still open for new retail business), which must accept a transfer from any UK registered pension scheme. She'll still need advice before the ceding (paying) scheme can pay over the transfer.

Thanks Marcon - I suppose what I'm saying here is the whole point this being "a legal requirement" - I'm kinda challenging the law itself I suppose whereby, to be legally forced to fork out money/effort/time, to end up at our own 'grown up' decision is quite frankly unbelievable !? Again - it's our money - who's to judge or decide what we want to do with it ?

Part of the point is to stop you or your wife making a decision which most people on this board will tell you is not the best decision.  Some of us are quite jealous of someone with a DB pension and shake our heads at someone who wants to give it up.

Now obviously we don't know your wife's circumstances and maybe she is in the 20% (is it really that high?) for whom the decision will be OK.  But it is a valuable right she would be giving up and too often people don't understand how valuable.  So yes the nanny state tries to stop them doing something that is most probably not a good idea for them.

And do not forget that there have been scams - "pension liberation" rings a bell where people have tried to take their pensions out only to find themselves robbed of the pension by some "adviser" (who is not authorised or regulated) and then hit with a bill from the taxman for "taking their money out of the pension".

Hi DRS1 - That's very nicely and succinctly put - I do understand your points and am gleaning the general concensus of "don't do it". I will say however that I could list at least 20 bullet points of perhaps why we would withdraw - all personal points but very well considered... Thanks again

Assuming your wife goes ahead with getting the advice then you can put those bullet points to the IFA and see what they say - if they agree you will not have to go the override route.

WoodForTheTrees123

Marcon said:

MarkTorquay said:

Marcon said:

MarkTorquay said:

Hi Hoenir - Not sure - I'll see if it's on the Pension Portal and/or the documents and will let you know ...

Which is precisely why advice is a requirement - to stop people making blind decisions based on little or no understanding of what they are giving up (and then trying to find someone to blame!).

Wow "to stop people making blind decisions based on little or no understanding of what they are giving up" - I had not realised that anybody is aware of our personal circumstances - Just throw a blanket over "the right decision", bound to fit everybody.... And to go through the whole process to end up with our override, because we know and understand (only us to blame!) what we want to do and why - is that not farcical ?

Your adviser is required to ensure they are, and give advice on that basis.

If your wife chooses to disregard it, so be it - but based on your first and second posts on this thread, you've already made your decision without understanding what the scheme offers, so might perhaps take note of any advice she receives before summarily dismissing it.

Thanks Marcon - I'm now actually swinging towards listening to what the advice will be ! (it's piqued my interest at least!)  I still believe we'd end up with our 'override' however perhaps I'm wrong pending said advice ! We shall see - I will pop back here to post what may happen ! If we do indeed end up overriding (god - sounds like that in itself may be a challenge to find somebody who may consider it !?!?!), I will then go back to my rant of having to go through the whole painful and costly process. If i'm proved wrong - I will eat humble pie and acquiesce...

molerat

The problem is that if it all goes wrong you will be looking for someone to blame and get your compensation from, part of that high cost is for the advisor's insurance for when you sue them.  You say you won't, and even sign a waiver to that effect, but once you see the "Where there's blame (even though it is all your fault) there's a claim" scammer adverts you might change your mind. And once you have got that negative recommendation you have got to find someone who will take that money, they could also be on the hook for your litigation.