Warning - boring - Pension and financial adviser question

[lost in london]

I'm floundering around not knowing what to do with a small pension pot built up when I was at my previous firm. It's sat in some bog standard Aviva thing, and i think it could be doing more. Anyone know who / where I should turn to?

 

[kevo]

https://www.moneyadviceservice.org.uk/en/categories/transferring-between-pension-schemes

 

[seagullsovergrimsby]

I've got a small pension pot from a top up scheme I took out whilst at BT through Abbey National at the time but the scheme has changed hands about four times and is now managed by Royal London (luckily I didn't do AVCs which were with Equitable Life) , they have frozen contributions but still take their monthly commission out of the accrued units. In the very small print it says that if I transfer it into my current employer's pension scheme they will deduct 33% so basically I will have to wait until my 60th birthday and have it paid as a trivial commutation lump sum (you do not have to take out an annuity and can take a one off cash payment if the value is under £18,000)

 

[bhanutz]

I've got a small pension pot from a top up scheme I took out whilst at BT through Abbey National at the time but the scheme has changed hands about four times and is now managed by Royal London (luckily I didn't do AVCs which were with Equitable Life) , they have frozen contributions but still take their monthly commission out of the accrued units. In the very small print it says that if I transfer it into my current employer's pension scheme they will deduct 33% so basically I will have to wait until my 60th birthday and have it paid as a trivial commutation lump sum (you do not have to take out an annuity and can take a one off cash payment if the value is under £18,000)

They will take your employers scheme into consideration for triviality. All your pension pots must be under the limit. You may have a shock when you try!

 

[bhanutz]

if the pot your talking about is under 2k you will be ok!

 

[mwrpoole]

I'm floundering around not knowing what to do with a small pension pot built up when I was at my previous firm. It's sat in some bog standard Aviva thing, and i think it could be doing more. Anyone know who / where I should turn to?

Do you know how well it's doing at Aviva? I have an old company pension with Aviva and it's been doing rather well over the last couple of years, it's not in a special plan just one of their standard balanced funds. I also looked at it as you are doing and found Aviva have loads of different pension funds. It's quite easy to compare the different funds at Aviva and change if you want to at no cost. You should also find out what annual charge you are paying and the annual charge for anything you look to swap to. These charges although they look small can make quite a difference over the long term.

 

[Zen Frenzy]

Thanks to the FSA's (now FCA's) rule changes that came into force at the end of 2012, circumstances like this show how mass market customers are becoming marginalised and unable to secure advice. The fee you'll be charged by qualified adviser is likely to be disproportionately large if your pension pot is tiny before even taking any transfer charge considerations into account. The Money Advice Service in Kevo's link is OK as far as it goes but it doesn't give advice tailored to you as an individual; it's very generic and has angered many advisers who consider it to be a misleading title. If you can get through to a pension specialist at Aviva as opposed to a standard call-centre person I think they'll be happy to answer direct questions around triviality etc but will stop short of offering you anything that could be deemed "advice".

 

[virtual22]

I'm floundering around not knowing what to do with a small pension pot built up when I was at my previous firm. It's sat in some bog standard Aviva thing, and i think it could be doing more. Anyone know who / where I should turn to?

How small is "small"?

The above poster is right about triviality, they add up all of your pots together and then assess you against the £18,000 limit. Plus, you will most likely have to pay tax on 75% of whatever you take as triviality.

 

[Pondicherry]

How small is "small"?

The above poster is right about triviality, they add up all of your pots together and then assess you against the £18,000 limit. Plus, you will most likely have to pay tax on 75% of whatever you take as triviality.

Not quite right I think. You can take two lump sums form different occupational schemes as long as the pot is 2000.00 or less and two lump sums from Personal Pension arrangements as long as each pot is less than 2000.00 (there are other conditions with these). If all your pension pots are worth less than 18000 then the triv rule as stated above applies.

 

[Shropshire Seagull]

There are companies that will do a free independent pension review for you - could do a job?

 

[Uncle Spielberg]

After RDR the option for " free " financial advice was ruled out. You will have to pay a fee of £ 500 or so to do it now.

 

[Weststander]

After RDR the option for " free " financial advice was ruled out. You will have to pay a fee of £ 500 or so to do it now.

RDR is good for the consumer. I know, from working with many different IFA's who are perfectly respectable, well intentioned and fully qualified, that the 'I' bit of IFA was unfortunately not strictly true. They couldn't help but lean towards e.g. one particular Scottish pension provider, as their commission was amazing. That pension provider did not secure the best returns on any of its funds compared to rivals over any time frame. RDR mandatorily ended that influence for many financial products.

To the initial poster, what about giving Hargreaves Lansdown or a national firm of that public standing, a call. Their costs are incredibly low and they have great reputation. You will see they are recommended & praised in much of the financial media and on independent finances websites.

 

[Uncle Spielberg]

RDR is good for the consumer. I know, from working with many different IFA's who are perfectly respectable, well intentioned and fully qualified, that the 'I' bit of IFA was unfortunately not strictly true. They couldn't help but lean towards e.g. one particular Scottish pension provider, as their commission was amazing. That pension provider did not secure the best returns on any of its funds compared to rivals over any time frame. RDR mandatorily ended that influence for many financial products.

To the initial poster, what about giving Hargreaves Lansdown or a national firm of that public standing, a call. Their costs are incredibly low and they have great reputation. You will see they are recommended & praised in much of the financial media and on independent finances websites.

True but the end result of the RDR is that 80% of people will not now seek financial advice as they won't pay a fee especaiily those that need the advise the most.

 

[Silkster365]

Thanks to the FSA's (now FCA's) rule changes that came into force at the end of 2012, circumstances like this show how mass market customers are becoming marginalised and unable to secure advice. The fee you'll be charged by qualified adviser is likely to be disproportionately large if your pension pot is tiny before even taking any transfer charge considerations into account. The Money Advice Service in Kevo's link is OK as far as it goes but it doesn't give advice tailored to you as an individual; it's very generic and has angered many advisers who consider it to be a misleading title. If you can get through to a pension specialist at Aviva as opposed to a standard call-centre person I think they'll be happy to answer direct questions around triviality etc but will stop short of offering you anything that could be deemed "advice".

Not strictly true - many advisors still work on a commission basis, with trivial commutation where there is no product to purchase it will not affect the 'rate' you are offered since there isn't one. Same is true if the pot is transferred to another scheme. Use unbiased.com and find an advisor who works on commission.

 

[Uncle Spielberg]

Not strictly true - many advisors still work on a commission basis, with trivial commutation where there is no product to purchase it will not affect the 'rate' you are offered since there isn't one. Same is true if the pot is transferred to another scheme. Use unbiased.com and find an advisor who works on commission.

I may be wrong but I think the RDR banned commission. That was the whole point so it is fee based now. They may be able to integrate the fee into the sale somehow but it is not called commission anymore.

 

[Silkster365]

After RDR the option for " free " financial advice was ruled out. You will have to pay a fee of £ 500 or so to do it now.

Many companies still offer products on a commission basis. Not strictly allowed under RDR when taking the legislation in black and white, but it is possible and happens in a lot of places (including my firm which I shall not name!)

 

[Uncle Spielberg]

Many companies still offer products on a commission basis. Not strictly allowed under RDR when taking the legislation in black and white, but it is possible and happens in a lot of places (including my firm which I shall not name!)

Fair enough which makes the whole RDR thing a sham as indeed I suspect it is.

 

[lost in london]

Thanks for all the thoughts above.

The pot is about £23k. I know I won't ever keep a close enough eye on it to make sure it's doing OK (and even if I did, it would be a complete punt every time on where to move it to), and am happy to pay someone else to, as long as the fees vs. benefits make it worthwhile. I don't know if it's a side effect of RDR, but Welbeck have been trying and failing for six months or so to take control of the pot but can't get around the legislation - some rules introduced apparently to stop dodgy advisers bouncing people from one provider to another every couple of years and taking a cut every time.

Moneyadvice service is probably too generic, looking for someone / a company that's recommended.

 

[Mellotron]

Am an IFA.

Clients were ALWAYS paying fees, they just didn't always see it, and whilst the RDR has been a nonsense to an extent, it has introduced far more transparency regarding fees which is a good and moral thing.

I personally wouldn't want "FREE" financial advice just like I wouldn't trust some bloke who promised to do some handyman work for me for "FREE". Advice worth having is worth paying for.

 

[Uncle Spielberg]

Am an IFA.

Clients were ALWAYS paying fees, they just didn't always see it, and whilst the RDR has been a nonsense to an extent, it has introduced far more transparency regarding fees which is a good and moral thing.

I personally wouldn't want "FREE" financial advice just like I wouldn't trust some bloke who promised to do some handyman work for me for "FREE". Advice worth having is worth paying for.

Yes but how much of the general population agree with you, 10% ? The vast majority would not pay £ 500 for advice on their pension when they could get a 50 inch flatscreen plasma tv for that.