jdoe wrote:it has thrown up another (to my mind) anomaly or quirk in the system, which I'd be interested to hear the panel's view about.
There are four options for the pension fund:
1 - pay as a tax-free lump sum
2 - convert into a 'beneficiary income release' fund
3 - transfer to another scheme with another provider
4 - lifetime annuity
That's all fair enough but the 'quirk' is that for option 2 & 3 it is necessary to use an IFA. Thus, I am forced to pay for independent financial advice in order to take what seems to be the most prudent and responsible option, ie option 2, while not needing any independent advice to take the whole lot as a tax-free lump sum and blow it all on wine, women and song!
I appreciate that different circumstances could mean different choices but it's the regulatory inconsistency that seems odd to me. If people cannot be trusted to make their own financial decisions, why not require an IFA for ALL the options?
I have no idea what a 'beneficiary income release' fund is. But what seems to be the most prudent and responsible option for me is option 1. You do not need an IFA (and I agree that is a silly condition for any option). And you can then invest the lump sum for income if that is your aim.
To me the issue with these types of things is always to free yourself from the institutions, advisors and rules, and just have the cash in your hands!