Urgent Advice Needed

manchesterlad

Please can somebody advise me about how I can possibly get a 25% lump sum from an old News International group pension scheme where I worked from 1/4/87 until 17/4/98 The group scheme is administered by Mercers. I am now 51 years old and have enquired twice since reaching 50 about receiving a tax free lump sum. On both occasions I have been told they cannot provide me with early retirement option as current fund is not guaranteed and is insufficient to purchase a pension at least equal to my GMP of £2,855.22 at my GMP payment date in 2022. My fund value as at March 2008 was £57,582.15 of which £52,877.82 is pre-April 1997 contributions. This in itself is worrying as when the last annual accounts were sent out value of my fund was £61,087.74 as at 1/10/2007. From reading other threads on forum I was wondering whether it would be possible to transfer out of this fund and put money into scheme that would allow me to get at 25% lump sum as my financial needs are pretty severe right now. I am currently paying into a civil service pension fund and have been doing so since February 2003.

I have contacted Braemers and they have sent me out info pack and forms to fill in to authorise them to act on my behalf but am worried that I might end up owing more money out in fees if they are unable to help . PLEASE PLEASE PLEASE can someone on here advise me, I would be so grateful

Martin

Retired_I.F.A.

See post #9 onwards the same applies to you.

http://forums.moneysavingexpert.com/showthread.html?t=853529

manchesterlad

Thanks for that, but would I be allowed to transfer fund out of this scheme, would there be huge reduction from transfer value to current value and what is your opinion of companies like |Braemer who say they can arrange pension unlocking. I am just trying to seek advice before committing by signing authority document. Thanks in advance

Martin

Retired_I.F.A.

would I be allowed to transfer fund out of this scheme,

Yes you have a legal right to do so.

would there be huge reduction from transfer value to current value

The transfer value is the current value

and what is your opinion of companies like |Braemer who say they can arrange pension unlocking.

The name rings no bells for me but I'd always prefer to deal with a local IFA one you can meet face to face and build a relationship with as this is just one area of the financial world he can help with.


I am just trying to seek advice before committing by signing authority document.

If you have merely the form to sign that gives them the right to enquire as to what benefits you have and the transfer value then signing that alone commits you to nothing. What you need to look into is their terms of business and see what they charge for the work. I've not done such transfers for 7 years now typically then around 5% of the transfer value would be commission nowadays a reasonable rate would be around 1% to 2% and 1/2% p/a again taken from the fund, dearer in the long run but IFA's can and will negotiate it with you.

Try www.unbiased.co.uk to seek out a local IFA

Retired_I.F.A.

How do you spell Braemar? I've just googled this and only read the headline It's enough for me to spell it C.O.W.B.O.Y.S.

http://www.fsa.gov.uk/pages/Library/Communication/PR/2006/091.shtml

manchesterlad

Initially they say there is no charge for doing investigations, but they do go on about how involved it could be to get the 25%, they then say no money is owed to them unless you go ahead. They have not mentioned size of fees yet. They only sent out info pack last week but have already rung twice to see if I have returned authority form. Their web site comes up top of the list on google search (https://www.pension-release.co.uk) I am just scared that if I approach IFA, they will charge me whether or not they can assist me, and this is something I can seriously not afford. Would an IFA work on a basis of only taking fee if able to secure the 25% lump sum and then taking fee from this amount. Have you any idea of time scales involved in getting my hands on lump sum. Thanks again Retired I.F.A, your info is so much more useful than info given by company that are looking for my business.

Martin

EdInvestor

Do not deal with Braemars, apart from having a bad track record they will charge you a bomb.

Have you asked the pension scheme for a transfer value? That would be step 1. As they can't offer you early retirement, you would need to move the pension to a private provider.

Do you need to take an income, or is it just the tax free cash you want?

manchesterlad

Thanks for the advice on Braemars. I have not asked for transfer value, as I said in first post the value in fund at 1st March is £57,000 approx, would transfer value vary from that, I would have thought it suited their purpose for me to transfer out so then that is one less GMP they have to worry about. Could I take an income as well as 25% lump sum? That would be too much to expect. I would be happy with just lump sum to get me out of the current trouble I am in. Would me being currently in civil service pension cause any problems with lump sum release from this old pension. Thanks again guys, your advice is really appreciated. Would love a rough idea of timescales on this if any ideas. I appreciate that I will probably be advised not to take lump sum by anyone in the know, but there is no alternative

Martin

EdInvestor

manchesterlad wrote: »

Thanks for the advice on Braemars. I have not asked for transfer value, as I said in first post the value in fund at 1st March is £57,000 approx, would transfer value vary from that

Probably not, you need to ask for it. A key question is how much of the transfer value is "protected rights" and how much non protected (PR money is related to the GMP, but the figures will be different from what you've quoted). .

. Could I take an income as well as 25% lump sum?

Yes of course.The maximum income will be obtainable if you put the fund into "income drawdown" in a SIPP (self invested pension). This will allow you to take 120% of the annuity rate for your age in income. You can also take no income, or anything in between and vary every year as you like. You could also take an annuity, but this is IMHO not advisable for someone of your age as it locks you into a low rate forever.

Would me being currently in civil service pension cause any problems with lump sum release from this old pension.

No.First find out the transfer value and the PR/nonPR split. There is a potential problem with the PR money, which can't be moved into a SIPP yet, this is likely to change in October. If you can't wait until then there is another way of solving the problem.

Retired_I.F.A.

Transferring into a plan and taking the tax free cash and leaving the rest to grow till such time you need income or buy an annuity is possible and is one of the options a decent IFA will discuss and explain to you.

Paying for the advice from an IFA wont mean you opening you wallet or writing a cheque as it comes from the transfer value. Unless you specifically tell the IFA to work on a fee basis outside of the fund

Time will vary, it's no quicky, there is a fair amount of work to be done and letters to and fro between Mercers and the IFA . 2 months all in would be pretty quick 3 more realistic.

manchesterlad

What would be the other way of solving problem??????
The info they gave me in last correspondence was that fund value is £57,582.15 of whcih £52,877.82 is pre April 1997 contributions. It also says the GMP which relates to pre-April 1997 service needs to be covered by the pre-April 1997 fund value. and that this is not guranteed. This really is a last resort to get finances in order, so if I am going to end up with £2000 or something than obviously it will not be worth going ahead. I am real desperate to get some honest advice. I can't really wait until October

A million thanks

Martin