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Post by martin44 on Apr 22, 2023 18:54:32 GMT
when i cashed in my small pension pot of 43K (i had already had the 25% free bit) i was asked on the form if i had seeked advice, with a response box of YES OR NO. i put NO ..and nothing said .. mind you it took me 4 months to get the tax back.
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keitha
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Post by keitha on Apr 22, 2023 19:57:37 GMT
I accept that there is a Ferrari problem that needs to be solved as otherwise the state picks up the tab when there there is no money left. I saw one recently an may even have mentioned it here. cashed in his pension spent it and is now complaining that because some of the pension he withdrew was "opted out" he doesn't get a full state pension AIRI "I drew my pension and spent it, no I find I don't get a full pension because of my private pension, but I spent it so I should get a full state pension"
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Post by bernythedolt on Apr 23, 2023 0:51:49 GMT
I think between us all, with our partial misunderstandings here and our sketchy knowledge there of how it all works, we've amply demonstrated why there's a legal requirement to obtain expert financial advice in certain circumstances!
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jonno
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Post by jonno on Apr 23, 2023 8:22:52 GMT
I think between us all, with our partial misunderstandings here and our sketchy knowledge there of how it all works, we've amply demonstrated why there's a legal requirement to obtain expert financial advice in certain circumstances! That's partly my fault and I apologise for that! As I said at the outset I only had sketchy details from the start, but thank you to everyone for their input, it really has been helpful. I have spoken to my friend and he is contacting Pension Wise tomorrow along with a further discussion with Royal London. Once again, thanks to all
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Post by bernythedolt on Apr 23, 2023 10:24:00 GMT
jonno , another point to consider, and the reason I'm not cashing in my DC pots yet: if I croak it before age 75, my wife can claim (within two years) the entire pots tax free, AIUI. So my pots will remain as a nice little tax-efficient insurance to help her out at that time. Obviously I don't know if your friend is married or needs the cash right now, but it's something to bear in mind. EDIT: details here... www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems/pensions-after-death#, The whole pot 100% tax free is significantly better than 25% tax free, hence I'm not cashing mine in unless I need to, or I pass age 75.
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michaelc
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Post by michaelc on Apr 23, 2023 16:11:19 GMT
I think between us all, with our partial misunderstandings here and our sketchy knowledge there of how it all works, we've amply demonstrated why there's a legal requirement to obtain expert financial advice in certain circumstances! I see your view seems to be the most agreeable in the thread but I just can't go along with it. How can it be justified to charge thousands to inform someone whether someone is being scammed or not? Moreover, I resent someone else telling me how I must spend my money - notwithstanding the Ferrari problem. Perhaps advice without strings might be the way to go (?) - that might cost in the hundreds instead of the thousands. We seem to be living in an era where bad investment decisions are always someone elses fault. If a fraudster convinces me to invest in some cock and bull story, its the banks fault for executing my instruction to pay the fraudster. Advice surely should be just that - take it or leave it as advice given in good faith with no possibility of suing me. Will I need a fitness note from the doctor in order to buy a packet of crisps in case I end up suing the shop for allowing me to buy products dangerous to my health? Where does it stop....
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Post by Deleted on Apr 23, 2023 16:47:09 GMT
When people lose money they want a nanny state (see PPI)
When they make money they want the state to stay out of their business
Often the same people
In this case this income and capital growth has been allowed to step out of the tax system. If the government now want you to pay a few thousands out to avoid a cross-the-boards disaster that seems sensible
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Post by bernythedolt on Apr 23, 2023 20:28:43 GMT
I think between us all, with our partial misunderstandings here and our sketchy knowledge there of how it all works, we've amply demonstrated why there's a legal requirement to obtain expert financial advice in certain circumstances! I see your view seems to be the most agreeable in the thread but I just can't go along with it. How can it be justified to charge thousands to inform someone whether someone is being scammed or not? Moreover, I resent someone else telling me how I must spend my money - notwithstanding the Ferrari problem. Perhaps advice without strings might be the way to go (?) - that might cost in the hundreds instead of the thousands. We seem to be living in an era where bad investment decisions are always someone elses fault. If a fraudster convinces me to invest in some cock and bull story, its the banks fault for executing my instruction to pay the fraudster. Advice surely should be just that - take it or leave it as advice given in good faith with no possibility of suing me. Will I need a fitness note from the doctor in order to buy a packet of crisps in case I end up suing the shop for allowing me to buy products dangerous to my health? Where does it stop.... It's a complex area, involving potentially life-changing sums of money, where half the people taking these decisions are sub-100 IQ (almost by definition)... what could possibly go wrong? I detect you have your mathematician's hat on here: drilling down to the nth degree comes naturally , but forget the crisps a moment and let's take a step back... Do IFAs really charge thousands for the straightforward cases most people are going to present with? Thousands to warn you about the potential scams out there, seriously? I have no knowledge in this area, but I just can't envisage most people being charged anywhere near that much. Perceiving an expert's advice as someone "telling you how you must spend your money" is, forgive me, a rather perverse interpretation surely? Can't the advice be ignored or questioned? Surely the government's motive is reasonable here - to pre-empt the very worst of mistakes? As agent69 has mentioned, you are presumably not obliged to follow the advice if you still insist on doing something dumb? The approach seems quite sensible to me, especially in light of PPI, as @bobo mentions. For pension cash-in, they have identified the worst cases, those people who, if their new venture goes belly up, could become a future drain on the state, and required them to first talk it through with an expert before potentially hitting the self-destruct button. Is that so unreasonable?
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michaelc
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Post by michaelc on Apr 23, 2023 21:15:54 GMT
I see your view seems to be the most agreeable in the thread but I just can't go along with it. How can it be justified to charge thousands to inform someone whether someone is being scammed or not? Moreover, I resent someone else telling me how I must spend my money - notwithstanding the Ferrari problem. Perhaps advice without strings might be the way to go (?) - that might cost in the hundreds instead of the thousands. We seem to be living in an era where bad investment decisions are always someone elses fault. If a fraudster convinces me to invest in some cock and bull story, its the banks fault for executing my instruction to pay the fraudster. Advice surely should be just that - take it or leave it as advice given in good faith with no possibility of suing me. Will I need a fitness note from the doctor in order to buy a packet of crisps in case I end up suing the shop for allowing me to buy products dangerous to my health? Where does it stop.... It's a complex area, involving potentially life-changing sums of money, where half the people taking these decisions are sub-100 IQ (almost by definition)... what could possibly go wrong? I detect you have your mathematician's hat on here: drilling down to the nth degree comes naturally , but forget the crisps a moment and let's take a step back... Do IFAs really charge thousands for the straightforward cases most people are going to present with? Thousands to warn you about the potential scams out there, seriously? I have no knowledge in this area, but I just can't envisage most people being charged anywhere near that much. Perceiving an expert's advice as someone "telling you how you must spend your money" is, forgive me, a rather perverse interpretation surely? Can't the advice be ignored or questioned? Surely the government's motive is reasonable here - to pre-empt the very worst of mistakes? As agent69 has mentioned, you are presumably not obliged to follow the advice if you still insist on doing something dumb? The approach seems quite sensible to me, especially in light of PPI, as @bobo mentions. For pension cash-in, they have identified the worst cases, those people who, if their new venture goes belly up, could become a future drain on the state, and required them to first talk it through with an expert before potentially hitting the self-destruct button. Is that so unreasonable? Not always. The situation I know about is that if you have a DB pension worth more than 30K, you need positive transfer advice to transfer it to a DC. There are long threads on MSE where the conclusion seems it is just about impossible. It is that fact alone that has made me form the view I have about what I consider to be the murky world of Pensions Advice. As for the point about thousands to warn against scams - that came from the brief discussion I had with AdrianC a few posts back. He seem to suggest the main benefit of advice was to avoid being scammed.
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adrianc
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Post by adrianc on Apr 23, 2023 21:21:18 GMT
As for the point about thousands to warn against scams - that came from the brief discussion I had with AdrianC a few posts back. He seem to suggest the main benefit of advice was to avoid being scammed. Not quite. The main benefit of ensuring that qualified, approved advice has been taken is to counterbalance "advice" from scammers.
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Post by bernythedolt on Apr 23, 2023 22:19:07 GMT
It's a complex area, involving potentially life-changing sums of money, where half the people taking these decisions are sub-100 IQ (almost by definition)... what could possibly go wrong? I detect you have your mathematician's hat on here: drilling down to the nth degree comes naturally , but forget the crisps a moment and let's take a step back... Do IFAs really charge thousands for the straightforward cases most people are going to present with? Thousands to warn you about the potential scams out there, seriously? I have no knowledge in this area, but I just can't envisage most people being charged anywhere near that much. Perceiving an expert's advice as someone "telling you how you must spend your money" is, forgive me, a rather perverse interpretation surely? Can't the advice be ignored or questioned? Surely the government's motive is reasonable here - to pre-empt the very worst of mistakes? As agent69 has mentioned, you are presumably not obliged to follow the advice if you still insist on doing something dumb? The approach seems quite sensible to me, especially in light of PPI, as @bobo mentions. For pension cash-in, they have identified the worst cases, those people who, if their new venture goes belly up, could become a future drain on the state, and required them to first talk it through with an expert before potentially hitting the self-destruct button. Is that so unreasonable? Not always. The situation I know about is that if you have a DC pension worth more than 30K, you need positive transfer advice to transfer it to a DB. There are long threads on MSE where the conclusion seems it is just about impossible. It is that fact alone that has made me form the view I have about what I consider to be the murky world of Pensions Advice. As for the point about thousands to warn against scams - that came from the brief discussion I had with AdrianC a few posts back. He seem to suggest the main benefit of advice was to avoid being scammed. Linky please? The vast majority of cases concern moving some DB to DC. The other way around seems sufficiently rare that I'm intrigued to read up further.
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agent69
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Post by agent69 on Apr 24, 2023 9:27:03 GMT
It's a complex area, involving potentially life-changing sums of money, where half the people taking these decisions are sub-100 IQ (almost by definition)... what could possibly go wrong? I detect you have your mathematician's hat on here: drilling down to the nth degree comes naturally , but forget the crisps a moment and let's take a step back... Do IFAs really charge thousands for the straightforward cases most people are going to present with? Thousands to warn you about the potential scams out there, seriously? I have no knowledge in this area, but I just can't envisage most people being charged anywhere near that much. Perceiving an expert's advice as someone "telling you how you must spend your money" is, forgive me, a rather perverse interpretation surely? Can't the advice be ignored or questioned? Surely the government's motive is reasonable here - to pre-empt the very worst of mistakes? As agent69 has mentioned, you are presumably not obliged to follow the advice if you still insist on doing something dumb? The approach seems quite sensible to me, especially in light of PPI, as @bobo mentions. For pension cash-in, they have identified the worst cases, those people who, if their new venture goes belly up, could become a future drain on the state, and required them to first talk it through with an expert before potentially hitting the self-destruct button. Is that so unreasonable? Your average high street IFA cannot give advice on cashing in your DB pension. It's a specialist service that can only be undertaken by authorised people. The purpose of taking advice isn't to warn you of potential scams, it's to make you aware of the pros and cons of cashing in. For the vast majority of people cashing in is a bad idea, but there may be exceptions, such as:
- Occasions where it may be acceptable to cash in - you have significant other assets, and are not relying on the DB pension to fund your retirement
- Occasions where it would be a good idea to cash in - you have serious health issues, which are likely to significantly reduce your life expectancy
I did a quick google on the cost of transfering and the first article said the average cost was £3,800. The fee isn't high because the advisor has a lot of work to do, or because they make loads of profit, it's explained in the article below. The reason is that the 'professional indemnity' insurers who stand behind advice firms have hiked their costs and restricted their cover.
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agent69
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Post by agent69 on Apr 24, 2023 9:40:25 GMT
Not always. The situation I know about is that if you have a DC pension worth more than 30K, you need positive transfer advice to transfer it to a DB. There are long threads on MSE where the conclusion seems it is just about impossible. It is that fact alone that has made me form the view I have about what I consider to be the murky world of Pensions Advice. As for the point about thousands to warn against scams - that came from the brief discussion I had with AdrianC a few posts back. He seem to suggest the main benefit of advice was to avoid being scammed. Linky please? The vast majority of cases concern moving some DB to DC. The other way around seems sufficiently rare that I'm intrigued to read up further. +1
Never heard of anyone transfering from DC to DB scheme.
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Post by bernythedolt on Apr 24, 2023 12:02:58 GMT
I accept that there is a Ferrari problem that needs to be solved as otherwise the state picks up the tab when there there is no money left. I saw one recently an may even have mentioned it here. cashed in his pension spent it and is now complaining that because some of the pension he withdrew was "opted out" he doesn't get a full state pension AIRI "I drew my pension and spent it, no I find I don't get a full pension because of my private pension, but I spent it so I should get a full state pension" While looking at the link provided by agent69, by chance I came across this very good explanation of the case above. Steve Webb really knows his stuff and I've always rated him highly. www.thisismoney.co.uk/money/pensions/article-11735955/State-pension-docked-20-week-contracted-happening.html
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michaelc
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Post by michaelc on Apr 24, 2023 12:06:00 GMT
Not always. The situation I know about is that if you have a DC pension worth more than 30K, you need positive transfer advice to transfer it to a DB. There are long threads on MSE where the conclusion seems it is just about impossible. It is that fact alone that has made me form the view I have about what I consider to be the murky world of Pensions Advice. As for the point about thousands to warn against scams - that came from the brief discussion I had with AdrianC a few posts back. He seem to suggest the main benefit of advice was to avoid being scammed. Linky please? The vast majority of cases concern moving some DB to DC. The other way around seems sufficiently rare that I'm intrigued to read up further. Ahh my mistake. I meant DB to DC. Bugger.
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