Transfer of personal pension?

isabelissimo

I have been paying into my personal pension since 1999. It was originally with Legal and General but this was later moved to ReAsssure Now, for reasons I still can’t understand. 

Long story short, in the past three years  have suffered an enormous amount of stress from the apparent mismanagement and incompetence when attempting to pay in lump sum contributions to my policy. Each took nearly three months to process and the lack of communication was unbearable. 

The latest thing to happen is that when now viewing my policy in the online portal, the section describing ‘Your Cover’ now continually states ‘This information is not available’. It always previously showed that the full value was payable upon death as a single lump sum and also that I had the Monthly Premium Waiver in place should I fall ill and not be able to pay. Now there is nothing. 

I am only four years now from retirement but I am really at my wits end with this company. I am so tempted to switch pension provider, even though I know they will screw me 1% of my pension pot for doing so but, to be honest, I have zero confidence in them and am fearful of entering retirement with them in control of my pension. 

Would it be a mistake to switch providers and this stage, aside from the exit penalty ? 

QrizB

According to a comment on a recent thread, the FCA banned exit fees several years ago. Why do you think you'll be charged one?

El_Torro

It's worth checking if this pension has a protected retirement date or any other benefits. If not then I don't see a problem with moving it, there are plenty of options out there. And yes, as QrizB says check whether there are any exit fees. 

I take it your current employer is not paying into this pension? If they were it would be a bit more complicated, since they are unlikely to agree to pay into a different pension.

isabelissimo

Just had a look. This from Reassure website -

“ If you’re 55 or over, we won’t charge you more than 1% of your pension’s fund value to transfer your pension or take your benefits, from 19 January 2017.

The cap applies to defined contribution (also known as money purchase) pensions and has been introduced to make it easier for customers over 55 to take advantage of the pension freedoms, which were introduced in 2015.”

So, it’s capped at 1% but it’s there, sadly.

bjorn_toby_wilde

QrizB said:

According to a comment on a recent thread, the FCA banned exit fees several years ago. Why do you think you'll be charged one?

I think they banned them for new pensions but capped them for existing ones. I’m sure someone who knows better than me can confirm.

isabelissimo

El_Torro said:

It's worth checking if this pension has a protected retirement date or any other benefits. 

Policy states my retirement date is that of my 67th birthday (Jan 2029) 
Under the ‘Money received’ section in the policy it makes mention of ‘ You benefit from an enhanced allocation rate’ and they seem to add a few quid in addition to what I pay monthly. 

I will confess, I have no idea what ‘an enhanced allocation rate’ is though…! 

isabelissimo

El_Torro said:

I take it your current employer is not paying into this pension? If they were it would be a bit more complicated, since they are unlikely to agree to pay into a different pension.

I was a Sole Trader from when I first started the pension in 1999. 

I have been running my own Limited Company since 2021 and, as Sole Director, therefore am employed by the company. 

My contributions are personal monthly contributions. I have, however, also made an annual Employer Lump Sum contribution for the last three years from the company. 

El_Torro

isabelissimo said:

El_Torro said:

I take it your current employer is not paying into this pension? If they were it would be a bit more complicated, since they are unlikely to agree to pay into a different pension.

I was a Sole Trader from when I first started the pension in 1999. 

I have been running my own Limited Company since 2021 and, as Sole Director, therefore am employed by the company. 

My contributions are personal monthly contributions. I have, however, also made an annual Employer Lump Sum contribution for the last three years from the company. 

In that case since your employer is essentially you, you don’t need to worry about that point. 

Are you still making personal contributions to your pension? Generally speaking it’s better for all the contributions to be made by the Ltd company as employer contributions. 

I’m not sure what an enhanced allocation rate is either. Hopefully someone in the know will post.

Marcon

QrizB said:

According to a comment on a recent thread, the FCA banned exit fees several years ago. Why do you think you'll be charged one?

They were banned for policies started from 2017, but the ban isn't retrospective.

Marcon

El_Torro said:

isabelissimo said:

El_Torro said:

I take it your current employer is not paying into this pension? If they were it would be a bit more complicated, since they are unlikely to agree to pay into a different pension.

I was a Sole Trader from when I first started the pension in 1999. 

I have been running my own Limited Company since 2021 and, as Sole Director, therefore am employed by the company. 

My contributions are personal monthly contributions. I have, however, also made an annual Employer Lump Sum contribution for the last three years from the company. 

In that case since your employer is essentially you, you don’t need to worry about that point. 

Are you still making personal contributions to your pension? Generally speaking it’s better for all the contributions to be made by the Ltd company as employer contributions. 

I’m not sure what an enhanced allocation rate is either. Hopefully someone in the know will post.

It generally means that more of your money is invested on your behalf, with less of it going to pay fees etc.

GrumpyDil

Enhanced allocation rates are where the amount paid in is enhanced to more than than the normal value for the plan. So for example with an enhanced allocation rate of 105% for every £100 paid in £105 will be paid to the pension.

Not sure of the background in this case but I recall policies in a company I worked at where the allocation rates were based on term to retirement and amount of investment. Although if the policy was taken early there was a recalculation based on the new term.

OP should probably try and get more details as it sounds like they may be getting an enhancement on regular premiums which could be worth keeping.