A client approached us as she had received a pre-retirement pack from an old company pension scheme, from a very well known high street name.
This was for a relatively small plan value, and the pension offered was very small, at about only £70 a year. Our client asked if we could arrange for her to draw the whole fund as cash, or alternatively if we could transfer the fund to add to her existing sizeable pension benefits that we manage, as she could not see any value in such a small pension.
We examined the data and came to the view she was right, and it was likely to be in her best interests to draw the fund, as the break even point was so far away into the future she was unlikely to benefit from the pension.
There was quite a sizeable penalty on making a transfer, but not on drawing the funds directly from the scheme, so the latter was clearly preferable. The transfer would only be a last resort as an option.
The retirement paperwork gave options for drawing the fund as a one off payment under the triviality rules, but our client did not qualify to use these as her overall pension savings were too high.
We therefore considered drawing the benefits under the small pot rules, where you can draw plans of up to £10,000 as one off payments. There are various versions of these rules depending on the type of scheme, but they are quite straightforward for occupational schemes.
There was no option for this in the paperwork, so we contacted the scheme administrators to ask for this.
The adminstrators confirmed our understanding that we could use these rules, but they then advised that the scheme have chosen not to adopt the rules that actually allow this. They also advised that they thought the scheme had a lot of members in a similar situation, with small pots, who would probably prefer, or have preferred, to draw the funds as cash.
We thought this stance was worth challenging, as it would actually cost our client quite a sum of money if she transferred her benefits instead, so drafted a letter for her to send to the scheme trustees to ask them to change their stance.
We have today had a reply from the adminstrators to advise our request, together with other data we had provided, was reviewed at the last scheme trustees meeting, and they have chosen to change their stance and will now be adopting the small pot rules, subject to some further processes.
Not only does this mean our client will be better off, but this also opens up this option for other members of the scheme, which could be to the benefit of many members.
Please note though, drawing a cash payment rather than a pension is often not the right choice. Advice is important, as shown by this case, where we were able to provide an option our client would have not known was even available.
If you would like advice on your pension please contact us on 01543 440 300, email us on enquiries@acuityfinancial.co.uk or have a look at our website.
S Nokes
MD
14/12/16
An Extra £700 Income Per Year? Yes Please!
/0 Comments/in Retirement Savings /by AdminOur client had several older style pension plans with guaranteed annuity rates and asked us to look at these, to obtain the best income available for him.
We obtained quotations from the provider, and these showed an annuity rate of only 7.07%. This was less than we expected from our knowledge of this type of scheme.
We therefore queried this with the provider, who confirmed there has been an error, and we finally managed to secure him a rate of 12.75%, which the original should have been.
Our client would not have been aware that the initial rate was incorrect, and if he had not come to us for advice he may have accepted the original quotations.
This error is unlikely to have been picked up by the provider, as data provided by them was incorrect on two occasions when we queried it, and only after a number of telephone conversations and persistence by us that they had made a mistake did we manage to obtain the correct rates.
Finally our client has ended up £700 per year better off, as a result of taking advice.
Our client was very happy and said “Thank you very much for your detailed letter and for all that you have done to secure the best possible rates for me. It was certainly worth my while consulting you!”
If you have any pension plans which you do not know a lot about (or even some that you do!) that you would like us to take a look at, give us a call on 01543 440 300 or email us at enquiries@acuityfinancial.co.uk.
Dealing with things so you don’t have to!
/0 Comments/in General /by AdminOne of our jobs as your financial adviser is to make things as easy as possible for you, by dealing with everything behind the scenes so you don’t have to.
Recently, a client was completely unaware that a provider had mismanaged their money during a pension transfer. We dealt with everything behind the scenes, so that the client did not have to worry, and managed to resolve the issue and save her some extra money in the process.
It is this kind of service that we provide, which you will not get from some financial advisers, and it is all part of the process for us. If you would like our advice on anything, from pensions to life insurance, give us a call on 01543 440 300, or email us on enquiries@acuityfinancial.co.uk.
Secure a very low fixed rate mortgage now whilst you can!
/0 Comments/in Mortgages /by AdminAccording to Bank of England Governor Mark Carney, a rise in interest rates could be happening in the “relatively near term”.
The Bank of England will next review the current interest rate on the 2nd November, so there is no time to lose. Contact us now to secure a fixed rate mortgage whilst rates are around ‘record low’ levels, because it won’t forever!
Email: enquiries@acuityfinancial.co.uk Tel: 01543 440 300
The Value of Financial Advice
/0 Comments/in Retirement Savings /by AdminNew research sponsored by Royal London shows those customers who receive financial advice can be better off on average by £40,000.
Read the full article here.
For more information on how we can help why not contact us on 01543 440300 or enquiries@acuityfinancial.co.uk
Born between 6 April 1970 and 5 April 1978? Unlucky, you may now have to work a year longer.
/0 Comments/in Uncategorised /by AdminThe government has today announced that the predicted rise of the state pension age to 68 will now happen in 2037, 7 years earlier than was planned.
This affects about 6 million people born between 6 April 1970 and 5 April 1978.
We would not be at all surprised if the state pension age were to rise further in the future, could it become 70, or even 71,72,73………..
Food for thought.
If you would like to retire earlier, and to have a decent pension in retirement, contact us to get saving, or to make sure your existing pensions are in good order.
Easter Weekend Business Hours
/0 Comments/in Uncategorised /by AdminHappy Easter To All Our Clients!
We will close for business on Thursday 13th April @ 5pm, and reopen on Tuesday 18th April.
The importance of advice
/0 Comments/in Uncategorised /by AdminA client approached us as she had received a pre-retirement pack from an old company pension scheme, from a very well known high street name.
This was for a relatively small plan value, and the pension offered was very small, at about only £70 a year. Our client asked if we could arrange for her to draw the whole fund as cash, or alternatively if we could transfer the fund to add to her existing sizeable pension benefits that we manage, as she could not see any value in such a small pension.
We examined the data and came to the view she was right, and it was likely to be in her best interests to draw the fund, as the break even point was so far away into the future she was unlikely to benefit from the pension.
There was quite a sizeable penalty on making a transfer, but not on drawing the funds directly from the scheme, so the latter was clearly preferable. The transfer would only be a last resort as an option.
The retirement paperwork gave options for drawing the fund as a one off payment under the triviality rules, but our client did not qualify to use these as her overall pension savings were too high.
We therefore considered drawing the benefits under the small pot rules, where you can draw plans of up to £10,000 as one off payments. There are various versions of these rules depending on the type of scheme, but they are quite straightforward for occupational schemes.
There was no option for this in the paperwork, so we contacted the scheme administrators to ask for this.
The adminstrators confirmed our understanding that we could use these rules, but they then advised that the scheme have chosen not to adopt the rules that actually allow this. They also advised that they thought the scheme had a lot of members in a similar situation, with small pots, who would probably prefer, or have preferred, to draw the funds as cash.
We thought this stance was worth challenging, as it would actually cost our client quite a sum of money if she transferred her benefits instead, so drafted a letter for her to send to the scheme trustees to ask them to change their stance.
We have today had a reply from the adminstrators to advise our request, together with other data we had provided, was reviewed at the last scheme trustees meeting, and they have chosen to change their stance and will now be adopting the small pot rules, subject to some further processes.
Not only does this mean our client will be better off, but this also opens up this option for other members of the scheme, which could be to the benefit of many members.
Please note though, drawing a cash payment rather than a pension is often not the right choice. Advice is important, as shown by this case, where we were able to provide an option our client would have not known was even available.
If you would like advice on your pension please contact us on 01543 440 300, email us on enquiries@acuityfinancial.co.uk or have a look at our website.
S Nokes
MD
14/12/16
Christmas and New Year Business Hours
/0 Comments/in Uncategorised /by AdminMay we wish season’s greetings to all our clients, old and new!
We will close on Thursday 22nd December @ lunchtime, and reopen for business on Tuesday 3rd January.
Update on Annuities
/0 Comments/in Uncategorised /by AdminThe FCA is going to force annuity providers to tell customers how much they can gain from shopping around.
Providers will need to give customers personalised information on their options, and they will need to show how much the highest quote available on the open market differs from their own.
This is a welcome step forward, as the FCA said that its research had shown 60 per cent of annuity customers failed to switch providers, and they estimated 80% could have got a better deal. This backs up our own experience.
We would suggest that it is as important to make sure the annuity is set up in the correct way.
For example, do you include…….a dependent’s benefit and if so at what rate, a guarantee period and if so for how long, value protection, escalation, have it paid monthly or annually, in arrears or advance, should you buy an invested annuity, a variable annuity, a fixed term annuity, a hybrid product (you get the point).
Also it is important to check whether you might qualify for an enhanced rate, as this can give a big increase in rates.
We feel it is important to get advice, to make sure you set up the right annuity and get the best rate, as normally once you have bought an annuity you normally cannot alter it.
This is an area we specialise in. We can advise on the full range of options, including looking at alternatives too, so an informed decision can be made. We automatically search the market for the best rate, rather than being told to do so, as we work for you.
We can help. Call us 01543 440300
Today is the right time
/0 Comments/in Family Finances, Insurance News, Retirement Savings /by AdminWe advised our client to delay taking his pension a few years ago, as it had special benefits. We’ve today set up an annuity for him, which is 159% higher than he could buy on the open market.
Why not make an appointment with us TODAY on 01543 440300 to review your finances, and see what we can do to help you?