The BEST SIPP ?

dunstonh

I can take out an open market Annuity without suffering MVA so its not a total disaster ...:rolleyes:?

SL are allowing you to do that? hmm...

Technically it is possible to do a type of open market option that doesnt buy an annuity. Its more like transfer (in fact it is transfer) but you tell SL to pay the whole lump sum to the new provider and they will pay the 25% TFC and commence benefits (which can be drawdown). If SL agree to OMO with no MVR then they must agree to transfer for immediate commencement with no MVR as well.

EdInvestor

IFAs have complained about this before, when it was first introduced (at a time when it may have been justified).

http://business.timesonline.co.uk/tol/business/money/article389996.ece

But there is absolutely no way they can justify it now.It's pure discrimination against people who want to do drawdown rather than annuities.

dunstonh

I had seen that before Ed, however, they waived it to buy a Standard Life annuity. In this case, Gatser has suggested they will waive it on an open market option.

Now, if you have more than one pension source going to a provider you cannot do the open market option with most annuity providers. You have to use transfer with immediate commencement. Its an admin difference but a very common method used.

So, if SL are allowing it with OMO they should allow it with transfer with immediate commencement. If you just ask for a pension transfer they will apply the normal penalties. If they know the transfer is to commence benfits they should not (assuming again no charge on OMO). If they do still say they will levy the charge then a complaint using the TCF guidelines should be put in place and then taken to the FOS if rejected.

Having a charge for filling in forms by one method and not for slightly different forms when the end result is the same (i.e. benefit crystallisation) would be a clear breach of TCF. Personally, I wouldnt let it go and would be taking it all the way. Indeed, it may only require a slight change of wording in your request to SL about how the transfer is being done to get the MVR removed.

EdInvestor

dunstonh wrote: »

If they know the transfer is to commence benfits they should not (assuming again no charge on OMO). If they do still say they will levy the charge then a complaint using the TCF guidelines should be put in place and then taken to the FOS if rejected.

Having a charge for filling in forms by one method and not for slightly different forms when the end result is the same (i.e. benefit crystallisation) would be a clear breach of TCF. Personally, I wouldnt let it go and would be taking it all the way. Indeed, it may only require a slight change of wording in your request to SL about how the transfer is being done to get the MVR removed.

Excellent point - the Treating Customers Fairly (TCF) guidelines from the FSA are reltaively new, certainly post dating the introduction of the SL policy.A complaint based on TCF would be well worth trying, followed by a FOS referral if rejected.

http://www.fsa.gov.uk/Pages/Doing/Regulated/tcf/index.shtml

Outcome no 6 would appear to be relevant.

TRUSt_NO_1_2

Gatser wrote: »

I have assumed 4% growth... not too ambitious.
(unless someone thinks otherwise...)

4% growth ?

Come on !

I was starting to enjoy this thread as informative .

Then you say 4% growth.

Whatever you choose at 4% growth you're going to get poorer.

Gatser

TRUSt_NO_1 wrote: »

Then you say 4% growth.

Whatever you choose at 4% growth you're going to get poorer.

.
.
I said "I have assumed 4% growth" ... in my spreadsheets, but that does not mean I aim for 4% (or realise 4%)

I do not see the point of planning for (say) 8% growth then being disappointed in retirement... I plan low but aim/achieve higher.

Gatser

dunstonh wrote: »

So, if SL are allowing it with OMO they should allow it with transfer with immediate commencement. If you just ask for a pension transfer they will apply the normal penalties. If they know the transfer is to commence benfits they should not (assuming again no charge on OMO). If they do still say they will levy the charge then a complaint using the TCF guidelines should be put in place and then taken to the FOS if rejected.

Indeed, it may only require a slight change of wording in your request to SL about how the transfer is being done to get the MVR removed.

At present I do not share your optimism because SL's own wording (SL News Bulletin 29.01.08) says:
"Payout being used to transfer to another plan including immediate drawdown (with SL or another provider),before originally selected retirement date, will be paid at TRANSFER VALUE" (ie after applying MVA)

I agree that the battle must continue... how can one (old/outdated annuity) pension be acceptable and another (drawdown method) pension not.

Gatser

EdInvestor wrote: »

But there is absolutely no way they can justify it now.It's pure discrimination against people who want to do drawdown rather than annuities.

So true!
Thanks for your moral support, Ed.
The battle must continue and I take all hints, tips and advice on here as very useful. I have 10 years to fight "the good fight"
I just wonder how many others are being locked in like this... or forced unfairly down the annuity route.

EdInvestor

A huge survey on annuities in the Mail on Sunday yesterday, conducted by the MoS personal finance editor Jeff Prestridge.
http://www.thisismoney.co.uk/retirement/article.html?in_article_id=443059&in_page_id=6&ct=5

I am sure Jeff would be interested to hear this shameful Standard Life tale,Gatser.

dunstonh

The thing which may have changed and the FOS are enforcing is the new TCF guidelines.

Who are Standard Life to tell you that they wont charge if you are buying an annuity from someone else but will charge if you go into drawdown. Either way SL have lost the fund so the cost is the same for them.

That doesn't at all fit with what the FSA are trying to achieve with TCF. Thats why a complaint followed by a referral to the FOS could be the sensible move.