Please help, cannot collect pension pot without form signing!!!

urshieb · 4 October 2019 at 6:06PM

Please can someone advise where or how you get a financial adviser to sign a form - we are in a catch 22 situation. My husband had 4 options to collect his pension pot at 60 years old (which he was in May). However, the option to take the whole amount is the best one for us (he has other pensions and we have money tied up elsewhere for when we retire properly at 66yrs). As the fund is over £30,000 the government stipulate that you must seek financial advice, they sign a form verifying that you have had advice and your fund is then released - WRONG!!! Try getting a financial adviser to sign the form who doesn't refuse to sign it unless you allow them to take control of your fund, and this advice does not come cheap, we are not bothered about the cost we just want the form signing. It is ONE piece of paper verifying that you have had advice. We have tried several financial advisers, one even came to the house, our daughter is an accountant, we are intelligent people and know exactly what we are doing. The adviser agreed that if we only took the 25% that we can take instead of the whole fund, my husband would have to live to be 108yrs to collect the rest as the GAR and monthly payment is rubbish. We have complained to Royal London (who the pension is now with) they agree and sympathise with us, stating that unfortunately they have found that a lot of people are in the same situation. The fund used to be with the Co-op prior to Royal London taking over and it was always planned for us to take the whole amount to clear our mortgage. This has gone on since 10 weeks prior to my husbands birthday (when we had to register his intentions). Please Please can anyone tell us how to get this blooming form signed.

Albermarle · 4 October 2019 at 6:15PM

There is no easy solution.
The legal need to go via a qualified financial advisor is there to protect people from transferring Guaranteed pension benefits into non guaranteed investments. There have been many scandals where transfers have ben made that were clearly not in the best interest of the client ( British Steel, NHS nurses etc _so this requirement was made mandatory . Unfortunately people in your position have to go through the same process when it is probably not necessary .
I am sure of you pay an IFA enough they will do it as a one off but it will cost you a few Grand..

jamesd · 4 October 2019 at 6:28PM

Is it also over £40,000? Advice isn't needed to take the 25% tax free lump sum and the remainder might be below the advice threshold.

Do Royal London offer any services that are paid for out of a deduction from the pension?

xylophone · 4 October 2019 at 6:37PM

https://adviser.royallondon.com/technical-central/pensions/transfers/safeguarded-benefits/

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

A pension plan with a GAR that expires at a specific point in the future (for example when the member turns 60) is a safeguarded benefit until the GAR expires. A pension plan with multiple GARs expiring at different specific points in the future is a safeguarded benefit until all the GARs have expired, at which point it ceases to be safeguarded, provided that there are no other safeguards attaching to the benefits.’

Did your husband's GAR expire when he reached 60?

Otherwise, if he does indeed require the advice of a Pension Transfer Specialist, you might try

https://adviserbook.co.uk and tick "confirmed independent" and "pension transfer" when the menu comes up.

urshieb · 4 October 2019 at 6:52PM

Thank you for your replies. We know it costs a lot for an IFA to sign the form, its just finding one that will sign it. It is literally one piece of paper verifying that we have taken advice - which we did, but all they were interested in was taking over our finances! Royal London have not offered any advice other than an extra complaint form to take the complaint further and explain that whilst they sympathise their hands are tied until the form is signed. It is over £40,000 but once all the taxes (which we are fully conversant with) are taken out it wont be a lot more. We will travel anywhere in the UK and pay the fee to get it signed.

xylophone · 4 October 2019 at 7:07PM

Has the GAR expired so that it is no longer a safeguarded benefit?

If it is no longer safeguarded, will RL release the whole of the pension as you require or permit the transfer to another provider?

If it is still safeguarded, then try for a PTS as above and explain that you will not need ongoing advice as you wish to take the whole of the pension at once?

SonOf · 4 October 2019 at 8:25PM

My husband had 4 options to collect his pension pot at 60 years old (which he was in May). However, the option to take the whole amount is the best one for us (he has other pensions and we have money tied up elsewhere for when we retire properly at 66yrs).

Why do you think it is the best option? I have lost count of the number of times someone thinks something is best but when checked by an adviser it turns out it isnt.

! Try getting a financial adviser to sign the form who doesn't refuse to sign it unless you allow them to take control of your fund, and this advice does not come cheap, we are not bothered about the cost we just want the form signing.

If you go to a wealth management FA/IFA then that is their business model. You need a general practitioner IFA firm.

and this advice does not come cheap

It won't do as you are asking the adviser to sign a form that takes on liability for your actions.

The adviser agreed that if we only took the 25% that we can take instead of the whole fund, my husband would have to live to be 108yrs to collect the rest as the GAR and monthly payment is rubbis

Most annuities, without a GAR breakeven in about 20-23 years. So, that seems strange. What is the annuity rate?

The fund used to be with the Co-op prior to Royal London taking over and it was always planned for us to take the whole amount to clear our mortgage

The CIS GARs on non-protected rights tend to be average or above-average to good. The CIS GARs on former protected rights tend to be naff and below current open market rates.

Was your husbands from personal contributions or was it from contracting out SERPS?

We have complained to Royal London (who the pension is now with) they agree and sympathise with us, stating that unfortunately they have found that a lot of people are in the same situation.

Complaining is not going to get you anywhere. They are doing nothing wrong.

Please Please can anyone tell us how to get this blooming form signed.

It needs a general practitioner IFA with pension transfer specialist pensions (either in full or the limited GAR permissions).

I personally have just done one of these with RL (ex CIS) and it was a time consuming pain in the !!!! as RL no longer do annuities. They use Just and then pay an increment to Just to match the GAR. We had to spend multiple phone based meetings with RL's annuity team to get the exact amount of the annuity and then wait after each one for the info to arrive. In our case, the GAR was valuable and worth having. The process with RL is time consuming and to be honest, if someone phoned me up saying they wanted to cash in a £40k pension with a GAR I would politely decline if they were not already an existing client or family member of a client.

1 - Cashing in the whole pension fund is a high risk transaction for an adviser
2 - Not taking a GAR on a plan is a transaction that many PI insurers want actual detail on with their PI proposal form (ours is currently up for renewal and 2 of the brokers wanted specific detail of every case where a GAR had not been utilised. Effectively, increasing the annual premium for ever more if they dont like what the adviser is doing.
3 - By asking for this transaction in isolation of the overall retirement planning scenario, it increases the risk to the adviser in the event of a future missale complaint. i.e. paying tax all in one year. Drop to MPAA when he is not retired. Other pensions available which may be more suitable.
4 - This is seen as a potential area that claims companies will be cold calling on in the coming years. And we know from PPI lots of people put in fake complaints and told lies to get compensation. So, its not really worth the risk to the adviser.

So, this is why you are having difficulties.

urshieb · 5 October 2019 at 4:46AM

Thank you, although it is not quite as in depth as it sounds, the form requires an IFA to tick 3 boxes and sign. There is no interrogation from RL, they just require the 3 boxes ticking, this verifies that we have sought advice and what we choose to do with the advice is up to us (my husband). We are aware of the cost involved and happy to pay.

Tcquins · 5 October 2019 at 7:30AM

You are not paying an IFA to sign a form. You are paying an IFA for advice. Whether you choose to take heed of that advice is up to you.

I’m deeply sceptical that a RL GARS would only have a cross over income period by 108 after you took the tax free cash.

If you are going to ‘manage’ it, the IFA is taking a big risk that if they give the advice to transfer, you’ll make a mess of dealing with it afterwards and then come back to complain later by investing it inappropriately, or stripping it out and paying excessive tax. They will have no control over that which is why they would be so reluctant to let you manage it. Even you’re perfectly capable of investing it yourself

xylophone · 5 October 2019 at 11:42AM

First of all, presumably you have checked that the situation is not covered by 4 above.

If not, then you need the services of a firm with PT permission if you wish to transfer - see link in 4 above and comments in 7.

What were the four options offered by RL?

In particular, how much is the 25% PCLS and what is the lifetime annuity offered?

SonOf · 6 October 2019 at 1:02AM

Thank you, although it is not quite as in depth as it sounds, the form requires an IFA to tick 3 boxes and sign.

By singing that form, the IFA is saying that they have given you regulated advice. That means completing a full analysis of your financial needs, assessing what you have now and future and making recommendations on that basis. They then take on liability for that advice which allows you to complain about them from the rest of their business lives (and in some cases, the lives of their spouse).

There is no interrogation from RL, they just require the 3 boxes ticking, this verifies that we have sought advice and what we choose to do with the advice is up to us (my husband).

RL will want a medical questionnaire completed and for the adviser to tell them what type of annuity is required. RL apply the GAR to all methods and adjust pro-rata. So, the rubbish old GAR applied to former protected rights that was based on 50% spouse with RPI and be uplifted by removing indexation and can then look more attractive.

I’m deeply sceptical that a RL GARS would only have a cross over income period by 108 after you took the tax free cash.

Me too. I suspect the annuity is the lower rate that was applied to protected rights and has an RPI annual increase and that indexation is not being used to calculate the breakeven point. And if it is the protected rights version, it also contradicts some of the information given on this thread.

Please help, cannot collect pension pot without form signing!!!

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