Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to kiloran,Anonymous,Howard,Gostevie,JuanDB, for Donating to support the site

Paying for pension advice: taking £500/year

yorkshirelad1
Lemon Slice
Posts: 424
Joined: October 5th, 2018, 1:40 pm
Has thanked: 97 times
Been thanked: 122 times

Paying for pension advice: taking £500/year

#408107

Postby yorkshirelad1 » April 29th, 2021, 4:12 pm

I'm helping my sister (who is due to retire in 18 months time) to line up all her (four) pensions (one DB, the rest money purchase). She's worked for 35 years salaried and is in the fortunate (or unfortunate, depending on which way you look at it) of being just a little over the ~£1m LTA, and will have to take action to minimise the effect. She has a mix of DB and money purchase schemes. It's a bit of a head hurter, but she has an IFA who we are very confident in (and it's so technical, that we really do need and are happy to pay for advice).

I have a simple (!) question about the paying for the advice (and spying a way to possibly reduce the size of the pot, every little helps), and think it might be called the "Pension Advice Allowance"

https://www.gov.uk/plan-retirement-income/get-financial-advice wrote:"If you’re paying into a pension scheme, you can ask your pension provider about taking out up to £500 to pay for financial advice on retirement. You can do this once a year up to 3 times without a tax charge. Not all pension schemes provide this."

https://www.gov.uk/plan-retirement-income/get-financial-advice

Has anyone ever done this?
How hard/problematic is it?
Do they just send you a cheque or does it go direct to an IFA or it is claimed on a tax return etc?
There seem to be quite a number of hoops to jump through and different qualifications/criteria.
Are there any more detailed regulations/rules/documentation about the ability to take £500/year somewhere; the best I could come up with is
https://www.which.co.uk/money/pensions-and-retirement/options-for-cashing-in-your-pensions/how-to-get-retirement-and-pension-advice-a5ub71g6uvql
TIA

Charlottesquare
Lemon Quarter
Posts: 1932
Joined: November 4th, 2016, 3:22 pm
Has thanked: 31 times
Been thanked: 262 times

Re: Paying for pension advice: taking £500/year

#408218

Postby Charlottesquare » April 29th, 2021, 10:27 pm

Found this link to the draft legislation and guidance re same, if it assists.

I may want to make use of this in a few years so really helpful you raised the point.

https://www.gov.uk/government/publicati ... tions-2017

This seems to be the final legislation.

https://www.legislation.gov.uk/uksi/201 ... tents/made

From a skim of the guidance notes, issued with the draft legislation, it seems to be a payment direct from the scheme to the IFA.

DrBunsenHoneydew
Lemon Slice
Posts: 544
Joined: November 10th, 2016, 10:04 am
Has thanked: 56 times
Been thanked: 151 times

Re: Paying for pension advice: taking £500/year

#408285

Postby DrBunsenHoneydew » April 30th, 2021, 10:37 am

Will an IFA really work with a £1M pot for £500?

scrumpyjack
Lemon Quarter
Posts: 1999
Joined: November 4th, 2016, 10:15 am
Has thanked: 158 times
Been thanked: 838 times

Re: Paying for pension advice: taking £500/year

#408303

Postby scrumpyjack » April 30th, 2021, 12:00 pm

DrBunsenHoneydew wrote:Will an IFA really work with a £1M pot for £500?


It should cover the first 20 minutes. I don't think there was any suggestion that it would cover the whole fee?

freewheeler
Posts: 6
Joined: April 16th, 2021, 11:52 am
Has thanked: 5 times

Re: Paying for pension advice: taking £500/year

#408338

Postby freewheeler » April 30th, 2021, 3:22 pm

DrBunsenHoneydew wrote:Will an IFA really work with a £1M pot for £500?


If you're paying the IFA purely for advice rather than to manage the pot then I don't see what difference the pot size makes. I'm in a similar position to the OP's sister (LTA wise) and recently sought advice about it from an IFA. This 'pay as you go' advice cost me £995. (TBH, ended-up wishing I hadn't bothered, but that's another thing...)

GeoffF100
Lemon Quarter
Posts: 2330
Joined: November 14th, 2016, 7:33 pm
Has thanked: 64 times
Been thanked: 345 times

Re: Paying for pension advice: taking £500/year

#408828

Postby GeoffF100 » May 2nd, 2021, 8:24 pm

DrBunsenHoneydew wrote:Will an IFA really work with a £1M pot for £500?

I do not know whether they are any good, or whether they are appropriate for the OP, but they charge £500 p.a. irrespective of the pot size:

https://bancroftwealth.co.uk/


Return to “Pensions - Practical Problems”

Who is online

Users browsing this forum: No registered users and 2 guests