Redundancy and Tax-Free Lump Sums

I know I have done pieces before on the lines of “why would I need/use a financial adviser” but over the last few months I have engaged clients in a manner where they were delighted afterwards. The general sentiments were “I couldn’t of done that myself, I wouldn’t have known what to do”.

One client was asking me to help with their retirement options. They found the current brokerage looking after their pension were not great at explaining their options. I discussed their options with them, contacted the pension provider on their behalf and was able to get clarification on their Tax free lump sum. There was a question mark over whether they were still entitled to their tax free lump sum because they had signed a waiver when they were made redundant from their employment.

I made our client aware that there is a way of processing your claim that may allow you a pension tax free lump sum, even if you have signed the waiver. This option could be taken away with future pension legislation changes and is not available for all clients, but in this scenario I was able to confirm to my client that we can get her a Tax free lump sum from her pension.

In another situation , a client contacted me about their retirement options. Firstly, for some reason the pension company had not highlighted a tax free lump sum on their options (which I cleared up). Secondly, this client had a particular medical condition which meant I was able to look to get them a better Annuity (pension for life) offer. This is called an enhanced (impaired life) annuity and its basically more money in your pocket for nothing other then confirming your health details. If you meet a certain criteria you can basically get more income for your money.

Most people do not seem to realise that they are very likely paying commission on their policy if there is a broker that is looking after their plans (even if that broker is not advising them). Most pension arrangements have a broker managing them.

I get paid a commission for this service and clarify exactly what I am receiving. Not just that, I generally have been getting as much, if not more, for my clients while being able to provide them with my expertise and relative independence (I do not work with/for one company but have agencies with most of the major Pension/life offices).