Cannot get pension pot without IFA, cannot pay IFA without pension pot…help please?

cfw1994

teapotbot said:

Slightly stuck as almost penniless. I have about 40K in an uncomplicated Pru pension pot and need to take it all.
Pru won’t release it until I have the form signed by an IFA and sent to them as it is over 30K.
I don’t have any funds to pay for an IFA so am in a tough Catch 22 situation here.
I am not resident in UK and have lived in France for the last 18 years. I cannot afford to travel to UK.
My ideal scenario would be a phone call with an IFA who would complete the paperwork for the Pru and send it to them, then issue an invoice for an agreed amount but giving me time to get the money from the Pru in order to pay the invoice.

I would welcome any practical advice on how to move this situation forwards please.

What do you mean by the bit in bold?
Are you trying to take it all out at once?

Why not ask for 25% tax free then the rest either as an annuity (as @dunstonh suggested) or regular income?
It is fairly clear your circumstances will prevent you doing a “simple withdrawal of the whole lot”, as described by others.

teapotbot

cfw1994 said:

teapotbot said:

Slightly stuck as almost penniless. I have about 40K in an uncomplicated Pru pension pot and need to take it all.
Pru won’t release it until I have the form signed by an IFA and sent to them as it is over 30K.
I don’t have any funds to pay for an IFA so am in a tough Catch 22 situation here.
I am not resident in UK and have lived in France for the last 18 years. I cannot afford to travel to UK.
My ideal scenario would be a phone call with an IFA who would complete the paperwork for the Pru and send it to them, then issue an invoice for an agreed amount but giving me time to get the money from the Pru in order to pay the invoice.

I would welcome any practical advice on how to move this situation forwards please.

What do you mean by the bit in bold?
Are you trying to take it all out at once?

Why not ask for 25% tax free then the rest either as an annuity (as @dunstonh suggested) or regular income?
It is fairly clear your circumstances will prevent you doing a “simple withdrawal of the whole lot”, as described by others.

Thank you for taking the time to reply.

The line above the one in bold states ‘and need to take it all’.
Pru will not release the money until they have received a signed form from an IFA and they state that this is required due to the amount being over 30K.
As I cannot get to an IFA, and have no funds to pay for IFA advice, I am kinda stuck, hence asking here for any advice.

Marcon

teapotbot said:

cfw1994 said:

teapotbot said:

Slightly stuck as almost penniless. I have about 40K in an uncomplicated Pru pension pot and need to take it all.
Pru won’t release it until I have the form signed by an IFA and sent to them as it is over 30K.
I don’t have any funds to pay for an IFA so am in a tough Catch 22 situation here.
I am not resident in UK and have lived in France for the last 18 years. I cannot afford to travel to UK.
My ideal scenario would be a phone call with an IFA who would complete the paperwork for the Pru and send it to them, then issue an invoice for an agreed amount but giving me time to get the money from the Pru in order to pay the invoice.

I would welcome any practical advice on how to move this situation forwards please.

What do you mean by the bit in bold?
Are you trying to take it all out at once?

Why not ask for 25% tax free then the rest either as an annuity (as @dunstonh suggested) or regular income?
It is fairly clear your circumstances will prevent you doing a “simple withdrawal of the whole lot”, as described by others.

Thank you for taking the time to reply.

The line above the one in bold states ‘and need to take it all’.
Pru will not release the money until they have received a signed form from an IFA and they state that this is required due to the amount being over 30K.
As I cannot get to an IFA, and have no funds to pay for IFA advice, I am kinda stuck, hence asking here for any advice.

I'm afraid that it sounds as if what you 'need' to do and what is actually possible aren't going to helpfully coincide, and that is why the input on this thread hasn't been able to solve your conundrum.

Veteransaver

dunstonh said:

Do you know the transfer value of the pension? Is it a recent valuation? I only ask as I recently got a transfer value on mine and it had more than halved since 2021

Are you referring to a DB pension (the only asset type to go down as much as that is index linked gilts. Its unlikely you were 100% invested in those).  That is very different to what the OP is referring to.

Yes, mine is a DB pension, which is what I assumed the op's pension was as it required IFA.

Veteransaver

teapotbot said:

cfw1994 said:

teapotbot said:

Slightly stuck as almost penniless. I have about 40K in an uncomplicated Pru pension pot and need to take it all.
Pru won’t release it until I have the form signed by an IFA and sent to them as it is over 30K.
I don’t have any funds to pay for an IFA so am in a tough Catch 22 situation here.
I am not resident in UK and have lived in France for the last 18 years. I cannot afford to travel to UK.
My ideal scenario would be a phone call with an IFA who would complete the paperwork for the Pru and send it to them, then issue an invoice for an agreed amount but giving me time to get the money from the Pru in order to pay the invoice.

I would welcome any practical advice on how to move this situation forwards please.

What do you mean by the bit in bold?
Are you trying to take it all out at once?

Why not ask for 25% tax free then the rest either as an annuity (as @dunstonh suggested) or regular income?
It is fairly clear your circumstances will prevent you doing a “simple withdrawal of the whole lot”, as described by others.

Thank you for taking the time to reply.

The line above the one in bold states ‘and need to take it all’.
Pru will not release the money until they have received a signed form from an IFA and they state that this is required due to the amount being over 30K.
As I cannot get to an IFA, and have no funds to pay for IFA advice, I am kinda stuck, hence asking here for any advice.

I would think you could find an IFa that took their advisory fee out of the proceeds?

Veteransaver

Marcon said:

Veteransaver said:

Do you know the transfer value of the pension? Is it a recent valuation? I only ask as I recently got a transfer value on mine and it had more than halved since 2021. Due to increasing interest rates / annuity rates
I was going to transfer out but it doesn't make sense now with the safeguarded benefits and the lower value (and an IFA probably wouldn't agree to it either)

IFA doesn't have to agree. The requirement is to 'receive' advice, not follow it (although probably wise to take due heed before making any decisions...).

I was under the impression that for DB schemes at least the IFA has to agree that it's a good idea to transfer out, and the catch 22 that a lot of people find themselves in is that most IFAs advise against it so find it difficult to transfer out? So you need to find an IFA that is happy to proceed? I may be wrong, usually I am lol. Or are transfers to a Sipp treated differently to a complete withdrawal?

Altior

Technically, only seeking IFA advice is required, positive or negative. However, if negative then you also need to find a provider that will receive a cash equivalent DB transfer where the client has been advised by a professional that it's not in their best interest. Persistent client in the jargon, and to the receiving scheme there is still therefore an underlying risk. 

Veteransaver

Altior said:

Technically, only seeking IFA advice is required, positive or negative. However, if negative then you also need to find a provider that will receive a cash equivalent DB transfer where the client has been advised by a professional that it's not in their best interest. Persistent client in the jargon, and to the receiving scheme there is still therefore an underlying risk. 

Ok cheers, so yes it's slightly nuanced isn't it if transferring versus taking the whole lot in one go due to the existence of new provider needing to accept it.
It is quite Kafkaesque really, in hindsight I should have transferred from my dB scheme in 2021 when it had a high transfer value (I'd likely have a pot worth about 300k now versus a DB cetv value of £75k with c 6k annual income at an age a fair bit later than I plan to retire, however as interest rates/annuity rates were very low back in 2021 then I doubt any IFA would have advised giving up the safeguarded benefits back then either!

Altior

It's a tad ironic that CETVs have collapsed since the normalisation of interest rates. I wonder if anyone has challenged negative advice to transfer with a high CETV which is now effectively half what it was at the time the advice was provided!

It is misleading the way that DB schemes present CETVs as a realistic prospect for sums £30K+, when in reality the prospect of a successful transfer is vanishingly slim, and expensive if successful. Hardly any stakeholder has an interest in allowing the transfer, aside from possibly the individual seeking to process one. This is perhaps the inevitable result of allowing people to be compensated for making a grave error, even when advised against it. 

Marcon

Altior said:

Technically, only seeking IFA advice is required, positive or negative. However, if negative then you also need to find a provider that will receive a cash equivalent DB transfer where the client has been advised by a professional that it's not in their best interest. Persistent client in the jargon, and to the receiving scheme there is still therefore an underlying risk. 

No need to be an insistent client - that term only applies where the adviser goes on to facilitate the transfer despite advising the client against transferring. There is no risk at all to the receiving scheme when it is a stakeholder pension, because the law requires them to accept any transfers from a UK registered pension scheme. 

Facts:

1. Advisers have never been the spoilsport 'gatekeepers' as they have often been portrayed, particularly on this site. They have been hamstrung by increasingly onerous FCA strictures and crippling PI insurance costs, which is why so many of them have relinquished their FCA permissions to advise on transfers from DB schemes.
2. When full advice has been given, the adviser must sign the necessary confirmation they have done so - known as a Section 48 certificate.
3. If someone has received full (as opposed to abridged) advice, and they have a statutory right to a transfer from a scheme with safeguarded benefits (a 'promise' of some description), the transfer can normally proceed whatever the advice says, provided the receiving scheme will accept the transfer. The exception is where the trustees of the ceding (paying) scheme identify certain risk factors in the proposed receiving scheme, in which case the transfer may be delayed or blocked to help protect members from falling victim to a scam.
4. Stakeholder pensions must accept any transfer from a UK registered pension scheme. That has been the position since stakeholders were introduced over 20 years ago, was confirmed in the 2015 Treasury consultation and remains the case still. Advice is still mandatory where the transfer value is at least £30K and the scheme has 'safeguarded benefits' (a DB scheme always has safeguarded benefits), because the ceding scheme cannot make a transfer payment without confirmation this has been given.
5. At the time of writing there are stakeholder providers open to new retail business. An individual can therefore apply direct to the provider to open one - easy to do by post, with a cheque for £16. They can then arrange their own transfer (with no adviser involvement beyond the provision of a Section 48 certificate, which enables the DB scheme to pay out the transfer - so no need for any 'insistent client' process). Given the tight timeframes involved with DB transfers, it makes sense to have the stakeholder pension set up before beginning the process.
6. You can then transfer on from the stakeholder pension to your SIPP with no further advice required (it's become a DC to DC transfer), and little chance the SIPP provider will decline it now that you aren't trying to transfer from a scheme with safeguarded benefits.

None of the above is to suggest that transferring is necessarily a good idea...if you've paid for advice (think upwards of £5K), it might make sense to pay heed to it!