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  • FIRST POST
    • spakkaman
    • By spakkaman 12th Jun 19, 10:56 AM
    • 50Posts
    • 19Thanks
    spakkaman
    Transfer of a section 32 worth £33k
    • #1
    • 12th Jun 19, 10:56 AM
    Transfer of a section 32 worth £33k 12th Jun 19 at 10:56 AM
    Advice on advice needed!

    My wife has a GMP with Clerical Medical worth £1374 per annum most of which is level. The CETV is ££33k.
    We are obliged to take financial advice.
    I want to move the £33k to my wifeís SIPP with fidelity - we have security of income with my final salary pension and other investments and I am confident of doing better than the annuity via drawdown investment and keeping the money in a sipp is good for inheritance tax efficiency.
    So I know what I want to do but I have to jump thru hoops to do it.
    I have spoken to fidelity retirement services re taking advice in order to move to the sipp and they have said it will cost us £3500 + vat which as % of the sum involved seems excessive.
    My wife recently (3yrs ago) moved in excess of £100k from a final salary scheme to a drawdown scheme with financial advice provided foc by the employer at the time.
    Any ideas on how to access advice on a pretty straightforward case at a cost that is proportionately reasonable?? I know S32 and GMPs are specialist areas but this isnít rocket science. Where can I go?

    There are guarantees but the shortfall to the guarantee is minimal.

    Thanks
Page 1
    • Albermarle
    • By Albermarle 12th Jun 19, 12:14 PM
    • 1,564 Posts
    • 997 Thanks
    Albermarle
    • #2
    • 12th Jun 19, 12:14 PM
    • #2
    • 12th Jun 19, 12:14 PM
    I have spoken to fidelity retirement services re taking advice in order to move to the sipp and they have said it will cost us £3500 + vat which as % of the sum involved seems excessive.
    As it is not a huge sum then this advice cost seems high but this kind of advice is always expensive .
    Did Fidelity say what happens if their advice is not to move it ?. Normally they and many other providers will only accept transfers if if the advice is positive . So you could possibly spend £3.5K for no result.
    • xylophone
    • By xylophone 12th Jun 19, 1:08 PM
    • 31,368 Posts
    • 19,448 Thanks
    xylophone
    • #3
    • 12th Jun 19, 1:08 PM
    • #3
    • 12th Jun 19, 1:08 PM
    https://forums.moneysavingexpert.com/showthread.php?t=5859693

    Discussed above ( and in many other threads).
    • spakkaman
    • By spakkaman 12th Jun 19, 5:50 PM
    • 50 Posts
    • 19 Thanks
    spakkaman
    • #4
    • 12th Jun 19, 5:50 PM
    • #4
    • 12th Jun 19, 5:50 PM
    Hargreaves lansdowne have offered £1500 + vat and then 2% inc vat of the value of the fund.

    It’s a big chunk of the fund and it doesn’t sit well with me as I’m totally confident re what I want to do with our money.

    I feel as though the government in trying to protect people is punishing me - I really hate the impact of lowest common denominator decisions although I appreciate there’s not really a way of avoiding it and if I were a politician I would do the same.

    Anyway if anyone can point me towards a place where I can access pension transfer advice at a cost that is sensible for a small fund then please don’t be shy.
    • MallyGirl
    • By MallyGirl 12th Jun 19, 7:46 PM
    • 3,971 Posts
    • 9,410 Thanks
    MallyGirl
    • #5
    • 12th Jun 19, 7:46 PM
    • #5
    • 12th Jun 19, 7:46 PM
    There have been many threads on this and the cost seems to be high as a result of very high insurance costs for the advisor.
    • wjr4
    • By wjr4 13th Jun 19, 11:19 AM
    • 600 Posts
    • 426 Thanks
    wjr4
    • #6
    • 13th Jun 19, 11:19 AM
    • #6
    • 13th Jun 19, 11:19 AM
    Which fund(s) is it currently invested in? You do realise that it can stay where it is and be outside of the estate for IHT purposes? You donít have to move it to a SIPP?
    I am an Independent Financial Adviser (IFA). Any posts on here are for information and discussion purposes only and should not be seen as financial advice.
    • Albermarle
    • By Albermarle 13th Jun 19, 2:43 PM
    • 1,564 Posts
    • 997 Thanks
    Albermarle
    • #7
    • 13th Jun 19, 2:43 PM
    • #7
    • 13th Jun 19, 2:43 PM
    and I am confident of doing better than the annuity via drawdown investment
    Confidence and reality are not always the same thing .
    Looking at the figures again and all the potential cost of transferring it , I think wjr4 has the best advice. Leave it where it is and take the regular income.
    • xylophone
    • By xylophone 13th Jun 19, 4:02 PM
    • 31,368 Posts
    • 19,448 Thanks
    xylophone
    • #8
    • 13th Jun 19, 4:02 PM
    • #8
    • 13th Jun 19, 4:02 PM
    Have you tried a local firm with a Pension Transfer Specialist?

    I noted that the poster in post 14 in link in my post above found this satisfactory.

    https://adviserbook.co.uk/

    You would tick "confirmed independent" and such other specialisms you require.

    If your wife stays with CM, then she could consider using the monthly pension to contribute to her SIPP.

    Presumably much of the pension is pre 88 GMP which will be level but the post 88 GMP should be index linked up to 3% (CPI/RPI depending on the policy wording).

    Has your wife obtained a state pension forecast?

    https://www.gov.uk/check-state-pension
    • PaulCooper
    • By PaulCooper 13th Jun 19, 5:53 PM
    • 209 Posts
    • 59 Thanks
    PaulCooper
    • #9
    • 13th Jun 19, 5:53 PM
    • #9
    • 13th Jun 19, 5:53 PM
    I might be going off on a tangent here, but I thought I'd throw this in for good measure.
    I have a section 32, which the way it's written looks like a pension of >£1k is payable at 65. After asking the provider about Guaranteed Annuity Rates (thanks to the knowledge of people on this forum), the provider confirmed that an annuity rate of 9.6% applied to the policy ---- 9.6% of £33k. There was no way of knowing this from the policy documentation and they probably weren't going to volunteer the info.
    So it's just a thought that you might have a hidden valuable guarantee with your section 32
    Regards
    Paul
    • xylophone
    • By xylophone 13th Jun 19, 8:41 PM
    • 31,368 Posts
    • 19,448 Thanks
    xylophone
    I have a section 32, which the way it's written looks like a pension of >£1k is payable at 65.
    Care needs to be taken with this particular type of policy not to confuse a Guaranteed Minimum Pension with a Guaranteed Annuity Rate.

    See https://www.financialadvice.net/s32_buy_out_plan/zone/1288

    A S32 accepts a transfer from another pension scheme.

    Some of these transferred pensions were from schemes which had "contracted out" of SERPS for the period between 1978 and 1997- members of the scheme were entitled to a scheme pension at least as great as they would have received had they been contracted in.

    This is the Guaranteed Minimum Pension.

    How did your S32 come into being? Are you saying that the scheme from which you transferred was not contracted out for the relevant period so that there is no question of a GMP?
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