Will I need IFA for a Scot widows transfer?

Bobziz

Hi,

I have two old SW pensions from 1988, a pension builder and a stakeholder. I will likely want to transfer both to a SIP once I reach 60 in 6 years time. Both will be over £30k and have some protected elements, they can be taken at 60 without and MVR and both have a guaranteed annual growth rate of 4%. This latter element seems irrelevant due to growth being well over this amount.

Am I likely to be required to take IFA to transfer or should it simply be a case of applying to transfer via my existing SIP provider, AJ Bell ? Thanks.

MallyGirl

protected elements and over £30k means advice needed usually - why do you want to transfer them?

Bobziz

Thanks. Not confirmed yet, but if I did transfer it would be to enable more flexibility in how I draw down. I believe my only option via SW is an annuity.

sandsy

What exactly are the protected elements? Is there a promise about the rate or level of income you could receive? This is what typical requires advice to transfer. If there is no such promise, you should be able to transfer them yourself. 

Bobziz

Thanks. This is the policy wording:

If you took out your plan before 1July 1994 (I did) we wont apply an MVR if you take your pension benefits, or transfer the value of your plan, from the EARLIER of your selected retirement date and age 60.

And:

If your plan is a Pensionbuilder plan,

a special guarantee applies for any units

added to it before 1st July 1994. For each

of those units, on a guarantee date, we

guarantee to pay the higher of:

• the initial value of the unit rolled up

at 4% a year; and

• the initial value of the unit plus any

regular or final bonus added in line

with our standard practice.

The initial value of the unit is its bid price

on the day it was added to your plan.

dunstonh

Bobziz said:

Thanks. This is the policy wording:

If you took out your plan before 1July 1994 (I did) we wont apply an MVR if you take your pension benefits, or transfer the value of your plan, from the EARLIER of your selected retirement date and age 60.

And:

If your plan is a Pensionbuilder plan,

a special guarantee applies for any units

added to it before 1st July 1994. For each

of those units, on a guarantee date, we

guarantee to pay the higher of:

• the initial value of the unit rolled up

at 4% a year; and

• the initial value of the unit plus any

regular or final bonus added in line

with our standard practice.

The initial value of the unit is its bid price

on the day it was added to your plan.

None of those are safeguarded benefits.  That is just how the fund works with a guaranteed minimum growth rate.

Are there any safeguarded benefits?  (your reference to protected elements, the 30k value and needing an IFA has been interpreted as safeguarded benefits)

Bobziz

I have obviously misinterpreted "certain valuable guarantees' as safeguarded benefits. What I've posted above are the only guarantees, so it sounds like a transfer should be straightforward if that's what I choose to do. 

I'm planning to use the SW pensions to partially plug the gap to SP age. If SW offer a competitive fixed term annuity at the time then I'll likely stick with them, but its good to know that I'll be able to transfer without significant cost if I want to go the flexi access drawdown route though. 

Thanks all.