Saturday , February 22 2020

Pension fury as woman asked to PAY to access her funds amid battle with DWP minister | Personal Finance | Finance

Pension fury gripped the Commons debate on Monday as Jerome Mayhew MP for Broadland asked Guy Opperman to meet with him to rectify his constituent’s issue. The pensioner in Norwich has been asked to pay for independent pension advice before she can access her funds. However, she can’t pay until she accesses her money.

Speaking in the House of Commons, Mr Mayhew said: “I ask the minister to meet with me concerning a constituent of mine who is unable to access her own pension fund without paying an excess of £2,000 in fees for independent financial advice.

“Money that she does not have until she accesses her fund.”

Guy Opperman MP, The Parliamentary Under-Secretary of State for Work and Pensions replied: “I am happy to meet with him and this will happen very soon.

“My Hon friend’s constituent should understand that obviously Parliament required collectively that there should be a £30,000 threshold whereby no individual can withdraw their DB pension without first receiving advice from an independent financial advisor.

READ MORE: Tragic miner took life after betting away £40k pension

“As a Conservative I am of course very keen for individuals too make their own decisions about their own money but this decision was made and insured so that an individual is protected from a decision without advice.”

Pension charges may apply annually for some people who pay into a pension scheme.

However, new research has sparked a warning that some people may be paying three times more than they should have to – potentially costing them tens of thousands of pounds over time.

From how much a person can afford to pay in during their working life to the amount that they’ll need during retirement, there can be a lot of considerations to make when it comes to pensions.

According to Profile Pensions, the advisers’ customer database shows that people are paying three times more than they should have to with an average annual provider charge of 1.09 percent.

The pension advice firm went on to suggest that consumer inertia could mean that the cost to pension holders could work out at £18,239 over 20 years.

This could potentially push retirement back by up to two years, Profile Pensions said, based on an additional pension income of £9,051 being needed in addition to a full state pension retirement for a “comfortable” retirement.

The calculations are based on a pension value of £50,000 growing at five percent a year with charges 0.4 percent and 1.2 percent applied.

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