Pension Release?

[mrypg9]

Originally Posted by Suenneil

Hi

If what you are saying is true (and trust me Im not suggesting you are telling lies! lol) then its very very worrying for people that may have gone ahead and released money ..... if this is the case then wouldnt the individuals be able to get some redress for bad advice ? incorrect or misleading advice ?

Sue

The answer to that will be No, Sue. These brokers will not be bound by any UK regulatory institutions.
SIPPS have many advantages: for example, as our commercial properties were owned by our SIPP, we were exempt from tax on the sales.
But the disadvantage (if you see it as such) is that you don't have the freedom you have with an 'ordinary' pension pot.
It's really important to get good impartial advice on matters such as this and not to be lured by what seems a sure way to realise your assets into cash.

[lakelander]

I've missed this thread for a while and have only just caught up on it again.

Firstly as a fellow UK Financial Adviser I agree 100% with everything UKMarbella2009 has said. There is nothing wrong with SIPPS or indeed QROPS from a reputable company but if someone tells you that they can transfer your UK pension to a QROPS and allow you to take it all in cash then they are breaking the law.

Not only will they charge you quite a hefty commission but as has already been said if the HMRC find out they will chase you for the tax on it.

[Suenneil]

Originally Posted by lakelander

I've missed this thread for a while and have only just caught up on it again.

Firstly as a fellow UK Financial Adviser I agree 100% with everything UKMarbella2009 has said. There is nothing wrong with SIPPS or indeed QROPS from a reputable company but if someone tells you that they can transfer your UK pension to a QROPS and allow you to take it all in cash then they are breaking the law.

Not only will they charge you quite a hefty commission but as has already been said if the HMRC find out they will chase you for the tax on it.

Hi ans thanks for that ,... I think its so important that people take proper advice where any finances are concerned and this one is a worry isnt it !?!?!?!?! and for some people the advice and information may well have come too late

Sue

[mrypg9]

But there are important differences between a SIPP and a stakeholder or personal pension which have implications for what you can do when it matures and for most ordinary rate taxpayers the advantages aren't so great -although a discount of 20% on a property worth £500000 isn't to be sniffed at!! For higher rate tax payers i.e. most business people the advantages are vconsiderable - which is why you cannot do what you like with them. After all, if you are getting a tax discount worth £200000 on such a property you can't expect to have your cake and eat it.
I think that a lot of people didn't read the small print or didn't get thorough advice from their accountant or whoever when they decided on a SIPP rather than another form of pension. If I remember rightly, setting up this kind of pension is quite complex -you need trustees and all this costs money.
SIPPS are IMHO best suited to people in business or who own assets - rented property for example -and who are not totally reliant on their SIPP for their retirement income.

[lakelander]

Originally Posted by mrypg9

But there are important differences between a SIPP and a stakeholder or personal pension which have implications for what you can do when it matures and for most ordinary rate taxpayers the advantages aren't so great -although a discount of 20% on a property worth £500000 isn't to be sniffed at!! For higher rate tax payers i.e. most business people the advantages are vconsiderable - which is why you cannot do what you like with them. After all, if you are getting a tax discount worth £200000 on such a property you can't expect to have your cake and eat it.
I think that a lot of people didn't read the small print or didn't get thorough advice from their accountant or whoever when they decided on a SIPP rather than another form of pension. If I remember rightly, setting up this kind of pension is quite complex -you need trustees and all this costs money.
SIPPS are IMHO best suited to people in business or who own assets - rented property for example -and who are not totally reliant on their SIPP for their retirement income.

I do agree with you to a certain extent. SIPPS do tend to be for the more sophisticated investor and the charges are a bit higher than a normal stakeholder or personal pension.

However, it does depend on the provider you go with. For example the Standard Life SIPP is basically a personal pension with personal pension charges until you decide you want to use investments outside the standard company portfolio i.e external funds or commercial property. For most people this will not be an issue.

The most important thing is get advice from an IFA and if you are not sure, question, question, question. Any reputable adviser will be happy to answer your questions and will be keen to ensure that you know exactly what you are getting into.

ps. I have used Standard Life simply as an example. It does not imply that I think their product is the best on the market or that I have anything against other companies products.

[GQL]

Originally Posted by lakelander

I've missed this thread for a while and have only just caught up on it again.

Firstly as a fellow UK Financial Adviser I agree 100% with everything UKMarbella2009 has said. There is nothing wrong with SIPPS or indeed QROPS from a reputable company but if someone tells you that they can transfer your UK pension to a QROPS and allow you to take it all in cash then they are breaking the law.

Not only will they charge you quite a hefty commission but as has already been said if the HMRC find out they will chase you for the tax on it.

I have just come across this thread, I am an adviser at a firm of UK regulated independent financial advisers.

I have read with interest some of the threads on this forum and there does seem to be a misunderstanding regarding what benefits are available from QROPS, particularly regarding the payment of tax free cash.

Whereas I agree that there are strict guidelines, set out in HMRC’s registered pension scheme manual (RSPM) as to the payment of benefits (such as income and lump sum payments) from a QROPS, within 5 complete UK tax years of the pension member's overseas residency, the benefits payable after this period depends on other factors such as the capabilities of the scheme in the jurisdiction and the basis on which their QROPS meet both the main and Primary Conditions (set out in the HMRC RSPM and in the relevant Statutory Instrument).
QROPS in Australia, for example, will legitimately allow 100% lump sum payment to be made to members at retirement (providing the member is outside the 5 year reporting period), because their pensions schemes (known as superannuation schemes) are set up for Australians on that basis and have worked this way for many years.

Australian superannuation schemes, as regulated schemes in their own jurisdiction, meet certain conditions with the UK’s HMRC for becoming QROPS, that other jurisdictions do not meet therefore allowing 100% tax free cash.