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FAQs for Pension Transfers

I was advised to transfer out of my pension scheme into a high risk fund. This was an unsuitable transfer as I am a cautious investor.

Clearly your adviser is culpable as he did not explain that the transfer was to a high risk fund.

I was told that I should transfer my pensions pot to a Personal Pension policy. This turned out to be poor advice because of the high Personal Pension expense charges.

You have cause for complaint. The adviser must explain the charges to enable you to make an informed decision whether or not to transfer your pensions pot.

I was advised to transfer into a Personal Pension policy. When my pensions arrangements were reviewed I was advised to transfer my Personal Pension into a new Personal Pension policy.

This sounds very much like a churned transfer. You can complain and your adviser will have to give a very good reason for his recommendation to transfer you to the new Personal Pension policy.

When I was advised to transfer my pensions pot I was not told that a critical yield of 7.2% was required to make the transfer viable. Can I complain about this?

Yes, you can. It was incumbent on your adviser to tell you about the critical yield. Without this information you are not put in an informed position to decide whether you should make the transfer.

I have heard in the news that pensions drawdown is the way ahead. Is this likely to be the right course for me?

You should think hard to decide if drawdown might be right for you. The disadvantage is that these pensions arrangements are expensive to run and can be justified only in the case of a large fund. Furthermore you have to consider the critical yield required to make the drawdown viable as an alternative to an annuity.

I have several defined contribution pension finds acquired as I changed jobs during my career. Is it a good idea to transfer them all into just one fund.

This is not necessarily a panacea for an improved pension overall. You may well be better off with your several different funds. You should seek qualified independent advice.

 

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