I want to access pension freedom but stuck

cosmo123 · 23 September 2018 at 9:59AM

I have a discontinued (2011) FSAVC which I paid into for 11 years. It is worth 41k. As an annuity it would be worth £830 annually. I thought it was a defined contribution scheme.

Having reached 55 yrs I decided to take it as a lump sum. I understand the tax implications.

I thought claiming it would be straight forward, I went through Pensionwise and received guidance. I am now stuck. I am duty bound to get IFA but seems this is a very specialised area and I cant locate an advisor. I am sensible enough to take advice and appreciate need to pay for that advice but have made the decision to take the lump sum.

I can not progress until the form is signed by a suitably qualified advisor. I have no issue with paying for advice. I have become quite disheartened by the process and assume I may never access the money now.

Any guidance appreciated.

Brynsam · 23 September 2018 at 10:53AM

FSAVCs are separate from the main pension scheme. If yours is defined contribution (and surely it is??), you don't need advice to transfer it unless there are some guarantees (which would be unusual for a FSAVC). What makes you think you are 'duty bound' to get advice?

cosmo123 · 23 September 2018 at 11:10AM

Thanks - yes much of what you have said is what I thought. The letter from the company states the following
Quote from letter:

'The policies you hold with us under the scheme have a guaranteed annuity and are worth more than £30,000. Under the Financial Conduct Authority rules, you are required to seek financial advice from a suitably authorised and regulated adviser before we can process your request.'

This was the basis of my 'duty bound' statement. Does the above shed any light?

Dox · 23 September 2018 at 11:10AM

cosmo123 wrote: »

I can not progress until the form is signed by a suitably qualified advisor. I have no issue with paying for advice. I have become quite disheartened by the process and assume I may never access the money now.

What form - and who is asking for it to be signed? And why?

Edit - just seen your post above. It's the GAR that means you need financial advice.

zagfles · 23 September 2018 at 11:16AM

That's an incredibly rubbish GAR - about 2% !! GARs are usually in the region of 10%, that's why they're valuable. But 2% sounds like the market rate rather than a GAR. Do you get a better rate at a later age?

soulsaver · 23 September 2018 at 11:21AM

Someone in your Pensions team hasn't realised its Free Standing?

dunstonh · 23 September 2018 at 11:40AM

Having reached 55 yrs I decided to take it as a lump sum. I understand the tax implications.

Are you sure you do? What are you doing with the money?

. I am duty bound to get IFA but seems this is a very specialised area and I cant locate an advisor.

The only reason you are "duty bound" to get advice is if the pension has safeguarded benefits. If there are no safeguarded benefits you do not need advice and you are free to be as generous to the Treasury as much as you want. So, what safeguarded benefits do you have on your pension?

Finding an adviser should be easy. Usually there several within a mile or two of each area. Finding an adviser that agrees with your decision will probably be harder. You haven't given us anything to go on but it is statically unlikely that what you want to do is the correct way of doing it.

I can not progress until the form is signed by a suitably qualified advisor. I have no issue with paying for advice. I have become quite disheartened by the process and assume I may never access the money now.

Going from wanting a lump sum to the assumption you can never access the money is a bit extreme. What purchase are you making now that leads to robbing your retirement years of £40,000 and paying a very large tax bill and handicapping your future contribution potential?

edit: started post when there were no replies. The replies answer some of the above.

Based on the additional info, the GAR does require you to get advice. Even if the rate is bad. However, at age 55, the GAR may not actually be effective yet. Many plans only start the GAR at age 60 or 65.

cosmo123 · 23 September 2018 at 11:42AM

Thanks for all the replies so far - the form I need to get an IFA to complete is titled:

'Adviser Form for transfers to flexible benefit plan'

It further states

'the adviser company has the required 53E permissions for 'advising on pension transfers and opt-out' as detailed under the pension schemes act 2015, clause 48'

dunstonh · 23 September 2018 at 11:45AM

cosmo123 wrote: »

Thanks for all the replies so far - the form I need to get an IFA to complete is titled:

'Adviser Form for transfers to flexible benefit plan'

It further states

'the adviser company has the required 53E permissions for 'advising on pension transfers and opt-out' as detailed under the pension schemes act 2015, clause 48'

I suspect virtually every adviser firm has that. The limitation to advise on GARs does not require a pension transfer specialist. It does require the firm to have the regulatory permission. I cannot see any reason why a firm would not have that as it requires no specialisation or cost.

cosmo123 · 23 September 2018 at 11:58AM

Thanks - this is perhaps where inexperience (on my part) comes in. As previous threads made clear it is very easy to access IFAs - I know this and have explored 'unbiased.com' as suggested by the pension firm and other advisory sites.

Quotes so far range from £500 to £1200. Is this a fair price if what I have is a FSAVC with some guarentees?

dunstonh · 23 September 2018 at 12:10PM

Quotes so far range from £500 to £1200. Is this a fair price if what I have is a FSAVC with some guarentees?

The work on this costs more than £500 to the adviser. So, that is dirt cheap. The liability on this is more than £1200. So, that is dirt cheap.

We had a PI insurance renewal through recently and the renewal proposal asked for details of every single case where we had advised against taking the GAR. Not total number of cases but actual summaries of the reason why on each and every case. That gives an indication of the high level of liability that exists with what you want to do.

You havent told us why you want to do it. So, it's difficult to know what the actual risk is but based only on the lack of information you have given, I would be inclined not to offer any service to you due to the high risks involved. I suspect many advisers would be the same.

I want to access pension freedom but stuck

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