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Drawing down a DC pension pot

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User
Posted 24 Dec 2023 at 20:21

Hi everyone, my husband has metastatic prostate cancer - he has just had a course of radiotherapy to try and knock out the primary tumour and will stay on hormone therapy to suppress the secondaries in his ribs. He is tired and fed up and wants to stop doing a part time job which earns him about 6K a year. We've spoken to Pensionwise and he has two Defined Contribution pensions which are worth just over 50K altogether. He is 60, so he could draw down 25 % tax free to give us a buffer and then the rest of the pension pot would cover his lost earnings until he's retirement age. But these two pensions were set up when flexi-draw downs weren't a thing, so the provider says we have to get an independent financial advisor to advise us and fill out a form - they don't have any in-house advisors.

I can't find an IFA to help - the only one I've managed to get through to so far says that the Pensions Regulator doesn't like people switching products when they are in 'ill health' and there would be issues for his estate. We don't have a clear prognosis for my husband but he should live beyond retirement age. He's signed off until 10 January and really doesn't want to go back to work (he has to get up before 6 and he is just so tired). 

Has anyone had similar issues to deal with, and if so how did you get around this?

Thanks,

Penny.

User
Posted 28 Dec 2023 at 20:47
Hi Penny,

The Macmillan Cancer Support site talks about retiring early due to ill health and accessing a pension. Although pointing out is depends on the rules of the pension provider which is the issue you are facing.

https://www.macmillan.org.uk/cancer-information-and-support/impacts-of-cancer/pensions-and-cancer/accessing-your-private-pension-early

Citizen Advise says pretty much the same. https://www.citizensadvice.org.uk/debt-and-money/pensions/nearing-retirement/what-you-can-do-with-your-pension-pot/

I think you might have to just keep on looking for a IFA who will support your cause.

Wishing you both the best for the future

Mike

User
Posted 28 Dec 2023 at 21:48
There are very few IFAs who are certified and insured to deal with DC pension advice and the ones that are charge a big fee.

A quick Google found these:

https://www.truepotential.co.uk/financial-advice/final-salary-pension

I went through this with mine and it did not get a recommendation to transfer primarily because of the survivor benefits mine offers. Yours may be different and you really to speak to trustees to get a full quote of all the benefits.

User
Posted 29 Dec 2023 at 21:01
It sounds similar to the situation we faced with my wife, who also wanted to retire early with a health condition being part of the rationale. It took a lot of work, but we got her work DC pension transferred to a SIPP where she could take 25% tax free immediately and draw down the rest to cover the gap before getting her state pension plus another work pension.

Her work pension provider wanted evidence we had had independent advice, as yours has. Happily a couple of years before, after I had had my PC treatment, we had had a one-off consultation with an IFA about planning for the future, and he was happy for us to include his details on the form without any extra charge involved.

I do see the logic, while you know what you want there is a risk you might throw away a benefit of the DC scheme like the one Francij has. The DC scheme wants someone else to accept responsibility for doing the checks.

It now seems we were lucky to have gone to an IFA (someone my late mother had used) who was happy to do a one-off consultation, most want to have an ongoing contract involving annual fees. You will have to ask around and look carefully at IFA websites to find someone suitable in your case.

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User
Posted 28 Dec 2023 at 20:47
Hi Penny,

The Macmillan Cancer Support site talks about retiring early due to ill health and accessing a pension. Although pointing out is depends on the rules of the pension provider which is the issue you are facing.

https://www.macmillan.org.uk/cancer-information-and-support/impacts-of-cancer/pensions-and-cancer/accessing-your-private-pension-early

Citizen Advise says pretty much the same. https://www.citizensadvice.org.uk/debt-and-money/pensions/nearing-retirement/what-you-can-do-with-your-pension-pot/

I think you might have to just keep on looking for a IFA who will support your cause.

Wishing you both the best for the future

Mike

User
Posted 28 Dec 2023 at 21:48
There are very few IFAs who are certified and insured to deal with DC pension advice and the ones that are charge a big fee.

A quick Google found these:

https://www.truepotential.co.uk/financial-advice/final-salary-pension

I went through this with mine and it did not get a recommendation to transfer primarily because of the survivor benefits mine offers. Yours may be different and you really to speak to trustees to get a full quote of all the benefits.

User
Posted 29 Dec 2023 at 01:28

Originally Posted by: Online Community Member
Hi Penny,

The Macmillan Cancer Support site talks about retiring early due to ill health and accessing a pension. Although pointing out is depends on the rules of the pension provider which is the issue you are facing.

https://www.macmillan.org.uk/cancer-information-and-support/impacts-of-cancer/pensions-and-cancer/accessing-your-private-pension-early



Citizen Advise says pretty much the same. https://www.citizensadvice.org.uk/debt-and-money/pensions/nearing-retirement/what-you-can-do-with-your-pension-pot/



I think you might have to just keep on looking for a IFA who will support your cause.

Wishing you both the best for the future
Mike

 

Just reposting so that I can activate the hyperlinks

 

"Life can only be understood backwards; but it must be lived forwards." Soren Kierkegaard

User
Posted 29 Dec 2023 at 21:01
It sounds similar to the situation we faced with my wife, who also wanted to retire early with a health condition being part of the rationale. It took a lot of work, but we got her work DC pension transferred to a SIPP where she could take 25% tax free immediately and draw down the rest to cover the gap before getting her state pension plus another work pension.

Her work pension provider wanted evidence we had had independent advice, as yours has. Happily a couple of years before, after I had had my PC treatment, we had had a one-off consultation with an IFA about planning for the future, and he was happy for us to include his details on the form without any extra charge involved.

I do see the logic, while you know what you want there is a risk you might throw away a benefit of the DC scheme like the one Francij has. The DC scheme wants someone else to accept responsibility for doing the checks.

It now seems we were lucky to have gone to an IFA (someone my late mother had used) who was happy to do a one-off consultation, most want to have an ongoing contract involving annual fees. You will have to ask around and look carefully at IFA websites to find someone suitable in your case.

User
Posted 30 Dec 2023 at 17:38

Thanks for your advice, everyone!

- Penny.

 
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