Cashing a pension under new rules
Discussion
Never failed to be amazed by the wisdom of the PH gurus so I would be glad of some help with a problem
New pension rules sounded like good news to me so I applied to take my pension pot in cash, with a view to buying a BTL with Mrs C to provide for our old age.
Filled in the paperwork and waited for the cheque..... simples......
...well NO actually! Pension provider says that under Sect 48 of the Pensions Schemes Act 2015 I am required to submit evidence of receiving financial advice from a member of FCA to include the advisor's FCA number. Otherwise no money!
Now, the Government's pensions helpline says "Nonsense, you can self certify. Tell them you want your money or go to the Ombudsman." One Financial Advisor says the fee for endorsing the form would be disproportionate to the size of the pension pot. Pension company will not budge.
Where can I go from here? Any ideas very.... very welcome.
New pension rules sounded like good news to me so I applied to take my pension pot in cash, with a view to buying a BTL with Mrs C to provide for our old age.
Filled in the paperwork and waited for the cheque..... simples......
...well NO actually! Pension provider says that under Sect 48 of the Pensions Schemes Act 2015 I am required to submit evidence of receiving financial advice from a member of FCA to include the advisor's FCA number. Otherwise no money!
Now, the Government's pensions helpline says "Nonsense, you can self certify. Tell them you want your money or go to the Ombudsman." One Financial Advisor says the fee for endorsing the form would be disproportionate to the size of the pension pot. Pension company will not budge.
Where can I go from here? Any ideas very.... very welcome.
Wow! Thanks gents.... and Mrs Sm1th.
To answer some of the matters raised:-
DWP referred me to a helpline for pension problems 0300 1231047. They were adamant that there is no legislation that makes financial advice mandatory and I am accurately relating the "tell them you want your money" notion.
But clearly you guys know differently because the pot is indeed over £30K (by a whisker) and it is described as a 'safeguarded benefit.'
Nevertheless, for us the BTL thing is a proven formula which has served us well for a number of years.
Ultimately, this is the route we want to take (and are already committed to) so it now seems like a matter of finding the most expedient way of getting the funds released.
I do understand, well almost, what you say about the wisdom of abandoning a 'safeguarded benefit' but as I see it, an annuity based on this sort of pot is not, on its own, going to keep me in my old age whereas invested amongst many other facets in my own property portfolio it has a reasonable prospect of doing so.
I am very grateful for the things that all of you have said. Typical of PH it is the first set of cohesive information that I have received on the subject. Tomorrow I will check out the advice and let you know what happens.
To answer some of the matters raised:-
DWP referred me to a helpline for pension problems 0300 1231047. They were adamant that there is no legislation that makes financial advice mandatory and I am accurately relating the "tell them you want your money" notion.
But clearly you guys know differently because the pot is indeed over £30K (by a whisker) and it is described as a 'safeguarded benefit.'
Nevertheless, for us the BTL thing is a proven formula which has served us well for a number of years.
Ultimately, this is the route we want to take (and are already committed to) so it now seems like a matter of finding the most expedient way of getting the funds released.
I do understand, well almost, what you say about the wisdom of abandoning a 'safeguarded benefit' but as I see it, an annuity based on this sort of pot is not, on its own, going to keep me in my old age whereas invested amongst many other facets in my own property portfolio it has a reasonable prospect of doing so.
I am very grateful for the things that all of you have said. Typical of PH it is the first set of cohesive information that I have received on the subject. Tomorrow I will check out the advice and let you know what happens.
Just thought it would be a good idea to post an update. As ever, PHers were spot on and I'm grateful for the advice.
I did indeed engage a Financial Adviser, a bit indignant about the fee at first but the info was very useful. Turned out that (as some had already suggested) the requirement for advice certification was that the pot included a (small) 'Protected rights annuity.' Also because the total was just over 30K.
Various projections were done to reflect anticipated life expectancies and although I realise that the FA is there to set out the facts and not make a decision for his client, it was clear to me that the protected rights element was such a small proportion of the whole, that unless I could find a genetic connection with Methuselah then the return on my money could not come anywhere close to that already being achieved in BTL property.
So...... Back to plan A. Money received and BTL already bought and operating....... FA firm will be a good contact for the future ...... A good moan to the pension provider even produced a contribution of half the FA fee!
Thanks again for the good advice from PH. Thought y'all may be glad to hear about a happy ending.
I did indeed engage a Financial Adviser, a bit indignant about the fee at first but the info was very useful. Turned out that (as some had already suggested) the requirement for advice certification was that the pot included a (small) 'Protected rights annuity.' Also because the total was just over 30K.
Various projections were done to reflect anticipated life expectancies and although I realise that the FA is there to set out the facts and not make a decision for his client, it was clear to me that the protected rights element was such a small proportion of the whole, that unless I could find a genetic connection with Methuselah then the return on my money could not come anywhere close to that already being achieved in BTL property.
So...... Back to plan A. Money received and BTL already bought and operating....... FA firm will be a good contact for the future ...... A good moan to the pension provider even produced a contribution of half the FA fee!
Thanks again for the good advice from PH. Thought y'all may be glad to hear about a happy ending.
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