LGPS transfer finding an IFA

domwk

I have not been working due to ongoing health issues. Late last year I was also diagnosed with prostate cancer of which I am being treated.
However I learned last year that to get my pension transferred so that I could get a draw down to help with financial needs. I have to pay an IFA to sign it off to transfer to an existing pension fund with HL or Standard Life.
Two days ago I spoke to one who said it would cost me 1k upfront and then due to other reasons as well as insurance they would have to cover. It would cost me an additional £7500 without guarantees.
Totally gobsmacked and refused. 
All I wanted was a draw down of up to £10k, but it will cost me £8500 to get it

What the hell?

The government is forcing you to get an IFAs advice to sign off a transfer of over £30k to avoid a pension scam.

Yet I feel I am getting scammed by this IFA.

Martin Lewis, if you read this, please address this not only for me but others.

Many thanks and kind regards.
Dom

Dazed_and_C0nfused

Sounds a horrible situation to be in but do you understand the difference between defined benefit and defined contribution pensions?

LGPS is a defined benefit pension, there isn't simply a pot of money for you to drawdown from.

MallyGirl

There is no way round this. If the value of the transfer will be over £30k then you must pay for regulated advice.
It might be that your health issues will increase the chance of a positive recommendation but there is no guarantee of that. Whether the advice ends up positive or negative on the transfer you still have to pay for it. The figure most usually quoted is around £5k and there are not many people who are interested in doing the work.
If you get a negative it is still possible to transfer to a stakeholder pension and once that is complete you could transfer again to get it into one of your other pensions as the advice requirement won't exist for the second transfer.

daveyjp

Rather then jump in the expensive deep end have you spoken to your LGPS provider about your options within the existing scheme?

kempiejon

We'd need to be at least 55 get to any pension including LGPS but ill health can change things, I'd suggest contacting the pensions people to see what's what.
https://www.lgpsmember.org/your-pension/planning/ill-health-retirement/

Silvertabby

Looking at your previous post, you are now over 55 and so can access your LGPS benefits subject to an early payment reduction.

Or, have you considered asking your ex employer if they will consider releasing your benefits under deferred ill health rules?  Deferred ill health benefits aren't enhanced, but they would be paid without the early payment reduction.  That said, there would be several hoops to jump through as part of the ill health process, so please don't bank on this.

dunstonh

Two days ago I spoke to one who said it would cost me 1k upfront and then due to other reasons as well as insurance they would have to cover. It would cost me an additional £7500 without guarantees.
Totally gobsmacked and refused. 

That doesn't sound too bad.   You could probably get it closer to £5,000 with a bit of shopping around.

All I wanted was a draw down of up to £10k, but it will cost me £8500 to get it
What the hell?

But what you want to do is not just that.   You want to transfer a DB pension to a DC pension, which is one of the highest risk transactions going for an advice firm.   It is also very expensive for advice firms.    It's a transaction that is unsuitable for 9 out of 10 people and is assumed to be a missale unless proven otherwise.   Hence its high cost.

The government is forcing you to get an IFAs advice to sign off a transfer of over £30k to avoid a pension scam.
Yet I feel I am getting scammed by this IFA.  

That is not why the Government is forcing advice.   It's because statistically, it's unlikely to be suitable and the loss potential is significant and they added in this consumer protection.

Martin Lewis, if you read this, please address this not only for me but others.

He hasn't owned this site for years and stopped contributing on the forums when it was sold.
However, you haven't got a hope in hell of getting the rules changed as that would be swimming against the tide.

Have you compared the commencement of the pension vs the transfer?

Albermarle

There is a search box at the top of the page.
Type in 'DB transfer' and you will see a lot of similar threads/questions/answers.