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Losing Enhanced Protection whilst legislation issues persist

WildparaplannerWildparaplanner Member
in Technical stuff

Hi,

We have a case where we recommended a transfer of a clients pension to a new contract for a whole raft of reasons. The client has enhanced protection.

However, the provider has stalled the transfer for the time being due to the current legislation issues and that they may lose their enhanced protection. We can force the transfer through though risking loss of the protection.

The client had already fully crystallised (leaving a small amount uncrystallised), isn't intending to contribute to a pension again (is very close to reaching age 75).

Is there any reason why we should continue to stall the transfer (potentially for a long time) to maintain a benefit which is no longer applicable? What else would we be losing which isn't obvious to me?

Both the ceding scheme and receiving scheme have an EOW form lodged with beneficiaries able to take beneficiary drawdown if required.

Thanks

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Comments

  • les_cameronles_cameron Member

    Technically you don't lose protection, you get to keep it but the allowances become £0.

    If there's nothing material that requires LSA/LSDBA then I can't see there is much of an issue.

    The draft regs to fix the issues have been issued, for comment this week. So with a bit of luck we might have the new regs late Sep maybe.

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  • WildparaplannerWildparaplanner Member

    In this case then, given they had used 100% of the LTA pre-April 2024, there's no impact essentially?

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  • les_cameronles_cameron Member

    If they have a % on their certificate for TFC then you'll lose some tax free cash - that's all I can think of.

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  • WildparaplannerWildparaplanner Member
    edited August 13

    Thanks Les. It was just standard enhanced with no protected lump sum

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