Royal London calls for rule change on GAR transfers

Royal London calls for rule change on GAR transfers

Royal London has written to pensions minister Baroness (Ros) Altmann calling for rules around guaranteed annuity rate transfers to be changed.

At the moment, transfers from pots with guaranteed annuity rates worth £30,000 or more require financial advice before they can go ahead.

But Pension Wise’s pensions specialist Fiona Tait said the difficulty for savers in accessing their pots could be solved by widening the mutual life and pensions company’s remit.

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She said: “Pension Wise was set up specifically to provide guidance for everyone eligible for pension freedoms.

“It is only right that Pension Wise should be the first port of call for customers, including those with guaranteed annuities.”

Stressing that Pension Wise had proven expertise in all aspects of pensions and was genuinely impartial, Ms Tait added: “Providers should be able to accept customer requests for pensions encashment if they can prove they have been through the Pension Wise process and understand the implications of giving up guarantees.”

However, advisers have so far expressed caution about taking on clients seeking defined benefit transfers, claiming the liability issues surrounding them are unclear. This was despite FCA guidance issued earlier this month.

Royal London’s chief executive Phil Loney has written to Baroness Altmann with the proposal to allow Pension Wise to provide transfer guidance.

Adviser view

Greg Heath, managing director of Lancashire-based Derbyshire Booth, said: “I cannot see how Pension Wise will be remotely qualified to give guidance on these transfers.”