Pot follows member – not around here it doesn’t!

liberation fraud

I took a look at this scorpion and decided enough was enough, I told myself…

I’m going to liberate my personal pensions and section 32 policies from high charges, poor fund management and non-existent governance into my new plan which has low charges, good governance and excellent investments.

Here is how it’s gone so far….

In October I decided to get my act together and review my pension plans. I have eight private arrangements. I have an occupational DB plan that’s staying put and it has money purchase AVCs with guaranteed annuity rates – these are going nowhere.

I had benefits under a former employers occupational plan which under investigation now turn out to be in a section 32 policy with an insurer.

I have two 226 policy with  negligible transfer values that barely match contributions paid between 1985 and 1988.

I have two personal pensions (one for contracting out) and a stakeholder pension.

I investigated the plans. I checked the charges, the transfer values, the funds and the governance – with the exception of the section 32, all were shocking. I decided to transfer all thse pension plans into my latest employer funded GPP and requested the paperwork.

Having completed all the forms for both ceding and receiving schemes for the six transferring schemes , I sat back and waited ……and waited ….and waited.

At the point of writing (nearly three months later)  one out of five transfers has completed. The other five  transfers are stuck  in the pipeline.

I had sent details of my fund holdings from my current providers to my new scheme but that is not enough, it turns out I have to give them  “benefit statements” as well. Well the benefit statements (which are produced at scheme anniversary) are not in my possession and that is because I have moved house several times over the years and the statements are  in someone else’s wastepaper bin!

Today I contacted the customer service team at the receiving scheme and asked them to use the letters of authority I’d sent them to contact the ceding schemes to get copies of these statements.

This exchange followed.

Provider “I’m sorry sir, we cannot act on your instructions”

Me; “But I am the customer”

Provider; “That is irrelevant”

To cut a long story short, if I was an adviser there would be no problem but as a customer I am irrelevant.

Personal Pensions were set up to be portable, you are supposed to transfer them from provider to provider without cost and without hassle. That’s what it said on the packet. The reality is that it is now nearly as hard to convince a personal pension provider to accept a transfer value from another personal pension provider as it is from a defined benefit scheme.

The sums involved (to me) are significant, they represent a large proportion of my savings. But I have no control of my money and am treated as a financial self-harmer!

Incidentally the only transfer that has gone through was so ineffeciently processed that I was “out of the market” for nine days (at a cost to me of £2,250 in lost investment returns – so much for electronic trading).

The obvious option is to hand over everything to an IFA and pay a hefty sum to get them to do the administration for me. Whether they’d get the same obstacles as I have I do not know but presumably they’d be consider relevant. 

But that’s not the point. I object to paying someone to do something on my behalf that I’m qualified to do myself, (I have the advanced financial planning certificate in a cupboard somewhere!)

If it is as difficult as this for me, what must it be like for others?

For all of the talk of pot following members, my experience suggests that there are such headwinds against the member transferring personal pension pots that the term “personal” should be struck off by trade descriptions. These pots belong to the advisers for whom they are a source of trail commission , to the fund managers who have carte blanche to deduct what they like from the Net Asset Value of my units and to the providers who consider my status as customer “irrelevant”.

Mr Webb, before we get ahead of ourselves in requiring automated transfers in the future, can we do something about easing the gridlock of the past?

It strikes me that I’m a victim of “pension captivity” fraud

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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5 Responses to Pot follows member – not around here it doesn’t!

  1. Portable in the personal pension sense probably means you can take the pension from job to job and continue paying high charges, not from provider to provider – that might impact their embedded value! I must admit I have struggled in the past to transfer old pensions, but found Hargreaves Lansdown very good at handling the administration for you (sort of free but they still collect rebates except on most of the trackers, but then charge £2 per month). This should change soon with the cleaner fund options coming soon, so they tell me. I also managed to transfer to Standard Life Direct on an execution only basis when it was occupational DC to Stakeholder – otherwise a forced refund would have ensued for my daughter.

  2. K Smith says:

    3 months isn’t bad even for an IFA transferring pensions. Some providers are notoriously bad for processing transfers. I used to work in life company as a broker consultant and I could list each company that always made new hoops to jumps through for transfers. IFAs would be screaming at me why its not happened and it always had to do with the ceding scheme.

  3. henry tapper says:

    Thanks Steven and K. Three months may be an average transfer time for a lifeco, but it’s a long time to press a couple of buttons! I estimate I think that I’m losing about £30 a week in added costs while I await decisions from my insurer on whether they will permit me to transfer my own money!

    How that can be considered fair , I do no know!

  4. Jeff Fox says:

    Having consolidated five different DC schemes previously a few years back, it was with a heavy heart that I am having to transfer another pot now. Heavy because it was slow, arduous and time consuming then. It seems it is no better now. I’m transfering into a well known DC provider. Having overcome the pension providers utter disbelief that I have don’t have, or more accurately want, a financial adviser I am now proceeding down the execution only route. If it weren’t for the fact that I am reasonably savvy about pensions I would have taken flight from the process about twenty times. Rather then the provider being happy about receiving a not-insubstantial pot, they are frankly terrified that I am going to sue them down the line. The language they use is apocalyptic, the forms I have to read and sign up to biblical and I have to do all the running. I understand the necesssity of proper risk mitigation but this isn’t right.

    The idea of portability is still a while away it would seem.

  5. Pingback: Can TISA hit out on pension transfers. | The Vision of the Pension Plowman

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