25% Tax Free Lump Sum (TFLS) Withdrawals

TeamanatBoE

Is anyone else having delays with receipt of their 25% TFLS Withdrawal Request?
I'm told due to responsibility laying with a third party, the SIPP Pension Fund provider is unable to give me any timescales on when I'm likely to receive my Withdrawal. 
With Budget Day fast approaching I'm extremely nervous that this is down to Government Pressure on Pension Providers?  Besides a complaint to the Pensions Ombudsman any other suggestions please?

flaneurs_lobster

** TIN FOIL HAT ALERT **

So you are actually asserting that The Government is applying pressure to the pension administrators to slow up payments of TFLS so that they can have more money available for taxing?

Seems fair enough, after all we all brim the tanks on the motor and stock up on fags'n'booze day before the budget, better do the same with your pension funds.

Albermarle

The providers have high demand due to people reacting to speculation about what is in the budget, so there are delays in processing applications.
My own provider normally takes eight working days, but said to be sure of getting the payments before November 26th the application had to be made by the 7th.

In any case the speculation has died down and it seems almost certain there will be no change to TFLS rules in the budget,

Besides a complaint to the Pensions Ombudsman any other suggestions please?

Yes do not waste their or your time on spurious complaints.

NoMore

Albermarle said:

The providers have high demand due to people overreacting to speculation about what is in the budget, so there are delays in processing applications.

Fixed that for you.

dunstonh

Is anyone else having delays with receipt of their 25% TFLS Withdrawal Request?

Most providers have emailed us to say they are experiencing high volumes and delays are to be expected.

I'm told due to responsibility laying with a third party, the SIPP Pension Fund provider is unable to give me any timescales on when I'm likely to receive my Withdrawal. 

Who is the provider?

With Budget Day fast approaching I'm extremely nervous that this is down to Government Pressure on Pension Providers?

There is no reason for now to be busier than any other time of the year apart from people once again falling for media speculation.    Indeed, your comment suggests that you are part of the problem.

Even though the media speculation has gone through every tax, relief and allowance going, some people still look at the 25% TFC.  And that is despite the most recent speculation saying tax-free cash isn't being touched.

Besides a complaint to the Pensions Ombudsman any other suggestions please?

a) You cannot go straight to the ombudsman without using the complaints process of the firm directly.   By the time you complain and get your response and then go to the ombudsman, you should get a decision in time for next year's budget.   And the ombudsman is unlikely to uphold your complaint due to small delays on a transaction that is often measured in 4-8 weeks.
b) is the timescale unreasonable? - Drawdown is given a longer timescale to pay out than most things.

TeamanatBoE

Albermarle said:

The providers have high demand due to people reacting to speculation about what is in the budget, so there are delays in processing applications.
My own provider normally takes eight working days, but said to be sure of getting the payments before November 26th the application had to be made by the 7th.

In any case the speculation has died down and it seems almost certain there will be no change to TFLS rules in the budget,

Besides a complaint to the Pensions Ombudsman any other suggestions please?

Yes do not waste their or your time on spurious complaints.

My application started in September and over a month after the provider confirmed receipt of my written application - their online system did not work - I am told that as they are reliant on a third party for the funds they still cannot provide a timescale.  I need the funds towards a development project i am doing but also concerned that the Chancellor may be tempted to reduce the amount to be taken tax free.

I don't see what is spurious about complaining not being able to crystallise my own money paid in  by my contributions.

dunstonh

 I need the funds towards a development project i am doing but also concerned that the Chancellor may be tempted to reduce the amount to be taken tax free.

Tax free cash is not being reduced.  So, that bit is not a concern.

Who is the provider as I am not aware of any provider on the intermediary side that is having any issues like that.  And I don't recall seeing any posts here from anyone else on the DIY side.   So, is it a niche provider?

TeamanatBoE

dunstonh said:

Is anyone else having delays with receipt of their 25% TFLS Withdrawal Request?

Most providers have emailed us to say they are experiencing high volumes and delays are to be expected.

I'm told due to responsibility laying with a third party, the SIPP Pension Fund provider is unable to give me any timescales on when I'm likely to receive my Withdrawal. 

Who is the provider?

With Budget Day fast approaching I'm extremely nervous that this is down to Government Pressure on Pension Providers?

There is no reason for now to be busier than any other time of the year apart from people once again falling for media speculation.    Indeed, your comment suggests that you are part of the problem.

Even though the media speculation has gone through every tax, relief and allowance going, some people still look at the 25% TFC.  And that is despite the most recent speculation saying tax-free cash isn't being touched.

Besides a complaint to the Pensions Ombudsman any other suggestions please?

a) You cannot go straight to the ombudsman without using the complaints process of the firm directly.   By the time you complain and get your response and then go to the ombudsman, you should get a decision in time for next year's budget.   And the ombudsman is unlikely to uphold your complaint due to small delays on a transaction that is often measured in 4-8 weeks.
b) is the timescale unreasonable? - Drawdown is given a longer timescale to pay out than most things.

I do understand that there may be delays but 4-8 weeks to do a transaction is unacceptable in my opinion.  I suspect providers are maybe bulking up withdrawal requests to reduce their workload? 

As regards timing i am intending to use the funds for an investment early next year so crystallising the amount seems sensible to do to achieve comfort on the amount available.  I made the withdrawal request in September so i am not doing a last minute application due to the potential budget implications.

I have since been advised that once i have confirmation of crystallisation then all should be good but it's still the principle of having to wait for my own money to be returned to me,  It takes nano seconds to sell on the stock exchange so why weeks to process a sales order?  Such delays do not make sense to me as each day's requests can be collated to be processed the following day if the process allowed.  Or am i missing something?

TeamanatBoE

dunstonh said:

 I need the funds towards a development project i am doing but also concerned that the Chancellor may be tempted to reduce the amount to be taken tax free.

Tax free cash is not being reduced.  So, that bit is not a concern.

Who is the provider as I am not aware of any provider on the intermediary side that is having any issues like that.  And I don't recall seeing any posts here from anyone else on the DIY side.   So, is it a niche provider?

Provider plan is Suffolk Life 

dunstonh

I do understand that there may be delays but 4-8 weeks to do a transaction is unacceptable in my opinion.  I suspect providers are maybe bulking up withdrawal requests to reduce their workload? 

Bulking up doesn't work.    Providers with manual processing have only so many staff available to key things in.   They may have some staff they can move around to help with peak flows but there is only so much they can do.

It takes nano seconds to sell on the stock exchange so why weeks to process a sales order?

Are you investing in assets that can be traded in real time and have no settlement period?
most people invest in assets that are traded once per day and have  2 or 3 day settlement period.   

It shouldnt take weeks to process a sales order.      Asset sales and drawdown are not linked.  They are two different things.   You should be able to sell your assets even if there is a software issue on the drawdown side.  Unless you are using assets that have trading issues and that is where the problem lies (can't be ruled out on what you have said so far, as Suffolk Life is a niche option typically used for more exotic, illiquid, or unregulated investments - but you should know if that was the case). 

Such delays do not make sense to me as each day's requests can be collated to be processed the following day if the process allowed.  Or am i missing something?

If it's tax-free cash only, then the quickest providers are about 20 minutes to get your money in your bank account, assuming cash is available.  If assets have to sold then the delay will be the trading time and settlement time.   With typical period for those being T+2 or T+3, you are looking to have the TFC in your account about a week later.         Any hold ups are down to having the staff capacity to do the manual work with each one and how good the software is (or is not).

poseidon1

TeamanatBoE said:

dunstonh said:

 I need the funds towards a development project i am doing but also concerned that the Chancellor may be tempted to reduce the amount to be taken tax free.

Tax free cash is not being reduced.  So, that bit is not a concern.

Who is the provider as I am not aware of any provider on the intermediary side that is having any issues like that.  And I don't recall seeing any posts here from anyone else on the DIY side.   So, is it a niche provider?

Provider plan is Suffolk Life 

A niche provider that only dunstonh as a professional adviser in this space would ever of heard of.

Looking at the historical track record and small businesses they have tacked on along the way, I would not be surprised if most if not all back office processes are manually implemented - see below

https://en.wikipedia.org/wiki/Suffolk_Life

Certainly it  would never have been my choice of  a SIPP provider, and if I had been lumbered with them involuntarily, I would have transferred my funds to one of the more well known diy SIPP platforms prior to any attempt to access benefits.