DB Transfer 'extortion' ?!

Bostonerimus1

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

I largely agree that with you that this is your benefit and you should not have to pay so much to get at it. However, people do silly things and I see the logic of getting some advice before making a decision...the thing is that advice should cost a few hundred pounds, not thousands. Another solution might be for the Government to provide that service, or you might only be required to have advice when you are not going to move the money to something like a SIPP; right now it looks like a bit of an extortion scheme.

For comparison I live in the US and I cashed in a small DB plan 10 years ago. The value was $35k, I got a letter and a form from the benefits department of my old employer, I filled it out and 2 weeks later I got a check for the $35k which I immediately deposited in the US equivalent of a SIPP. No fees whatsoever, but also no advice so the chance to do something really dumb. But so far it is ok. I worked out that I would need the $35k to grow at 6.5% every year to match the lifetime income of the DB pension up to age 84, right now the average return is 8% per year.

WoodForTheTrees123

Dazed_and_C0nfused said:

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.

Hi D&C - I probably don't. And also, my statement "her money" - I know it's been said that it's not technically hers etc etc however, if/when she decides to "take the pot/sum/balance/monies", I do know what the value will be and that value will be paid to her. One could argue therefore that it sorta is hers (at that point) ? I do understand what you mean btw and trying not to be pedantic however it can also be seen from that perspective ? The value and where it currently resides is just semantics I suppose...

WoodForTheTrees123

DRS1 said:

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.

Ooohh... A chink of light ! Yes, I suppose I already foresaw us putting the points to the IFA as part of the process - The brief initial conversation I had with an IFA suggests however that the 99% 'default position' will be "not advised" ... Maybe our story/circumstance will swing it (I doubt it!)

WoodForTheTrees123

DRS1 said:

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.

It's an interesting thought - I suppose I already pictured putting our points across to the IFA during the process however, from an initial converstion over the 'phone with one, I get the feeling that the 99.9% 'default position' will be "not advised". Perhaps our story/reasons will sway it (but I doublt it!)

DRS1

We all look forward to hearing what happens.

Dazed_and_C0nfused

MarkTorquay said:

Dazed_and_C0nfused said:

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.

Hi D&C - I probably don't. And also, my statement "her money" - I know it's been said that it's not technically hers etc etc however, if/when she decides to "take the pot/sum/balance/monies", I do know what the value will be and that value will be paid to her. One could argue therefore that it sorta is hers (at that point) ? I do understand what you mean btw and trying not to be pedantic however it can also be seen from that perspective ? The value and where it currently resides is just semantics I suppose...

Maybe if you shared what the current pension value is it would understand your logic.

Taking. £50,000 to give up the right to say £800/year with capped inflation protection and no automatic PCLS is going to be a totally different proposition compared to say £4,000/year with no inflation cap and automatic PCLS of 3x the pension.

eskbanker

MarkTorquay said:
Yes, I suppose I already foresaw us putting the points to the IFA as part of the process - The brief initial conversation I had with an IFA suggests however that the 99% 'default position' will be "not advised" ... Maybe our story/circumstance will swing it (I doubt it!)

Feel free to rehearse them on here (free!) by sharing the bullet points you had in mind....

Moonwolf

Bostonerimus1 said:

Another solution might be for the Government to provide that service, or you might only be required to have advice when you are not going to move the money to something like a SIPP; right now it looks like a bit of an extortion scheme.

I can't see this working well.

Firstly: It will cost not the Government but the taxpayer and looking at the alarm when there is any effort to raise taxes to pay for things, it will presumably have to come from somewhere.

The fact that are costs and there is a risk of failure to get the advice they want clearly puts a lot of people off, if it was free then there would probably be more requests that the government would have to pay for.

Then there is the problem that people just wouldn't believe the negative government advice, you already think it looks like extortion.  We get already get more than enough people on here claiming it is some sort of conspiracy to "keep their money" and at the moment the advice doesn't come from the government.

And finally, while some people will handle the money sensibly many will be stupid or unlucky; and spend, lose the money on poor investments or be defrauded out of it and as a taxpayer I will end up paying pension credit for their retirement.

Albermarle

• 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"

Just to expand on this part.
If the advisor does not recommend the transfer out ( which seems highly likely), you can still transfer as an 'insistent client' . The only legal requirement is that you go through the process, and if the answer is 'not recommended' you can still transfer the DB out. The DB scheme should be OK as long as you can get proof from the advisor that you have been through the appropriate process. Normally the DB schemes are very happy to get the liability off their books. ( which tells you something)

The issue is that hardly any retail ( dealing with the public) DC pension providers, will accept a transfer from an insistent client. There used to be a few and now there are only two? outdated stakeholder schemes that by the way they are set up are forced to accept transfers ( not sure for how much longer) .
I think some advisors have access to some smaller pension providers who may accept certain insistent clients. I presume this is what your advisor was referring to . It is almost certain they will want to charge another hefty fee for doing this .

Cobbler_tone

Mark, if you do filter through some of the straight talking and personal barbs you can educate yourself on this forum. I thought I was fully up to speed on pensions and had a lot of training in former role. Then you get into the murky world of CETV's, their history and people's instance that it isn't a 'pot', although the CETV can become a 'pot' (and it is a sum of money as a value) so semantics comes into play. The one thing that no one knows is someones exact personal situation but I think you will have gathered that 'throwing in' a guaranteed lifetime pension isn't for most people. The conversation around buying an annuity vs drawdown is a different thing altogether.
Maybe compare the 'lump sum' on offer vs the guaranteed pension vs buying a lifetime annuity elsewhere. Or compare raising the capital another way vs the pension on offer, if you need the cash now. Like I said, every situation is different and someone may have a gun to your head for the money!