Opinion  

Advice allowance: genius move or gimmick?

Simoney Kyriakou

Simoney Kyriakou

When my own employer offered us £1,000 per person towards independent financial advice as the Financial Times switched ownership and therefore pension scheme, I thought this was a great idea.

It showed the company valued its staff’s concerns about the pension scheme changes and were committed to helping us make the best individual decisions.

Although way back in the past (think 1999 and then in 2002) I had nice defined benefit pensions, I left these well alone and they have been deferred until my retirement.

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Since then I’ve had four defined contribution (DC) pensions schemes (Scottish Equitable, Aegon, Friends Life and now Zurich).

My idea was to combine all these four DC pensions into one, with Zurich. To this extent, I sought the advice of a pensions adviser, letting him know upfront I had £1,000 to play with.

I carried out my own Finametrica risk profile (correctly guessing upfront I was a 5.4 on the Risk-tor Scale). I sought all the requisite information from the various providers.

Eventually after some chasing it became clear the love was one-sided. I was advised (for free) to get Zurich to do it for me because as they were all DC pensions, post-freedoms it would be possible for the provider to do it all.

Maybe £1,000 wasn’t enough for the paperwork involved. Maybe Zurich could do it for nowt. Maybe it would be easier to get the provider to sort it out, if I provided the proper documentation.

The problem is, six months later, I still haven’t moved all my various pots. I’ve got £54,000 sitting in these various DCs and haven’t had the time or, honestly, the motivation to get this sorted out.

What I wanted was someone to do it for me, especially as the money would be coming from my company and not out of my savings.

This is exactly the reason I pay an accountant £300 to do my tax returns each year. I make barely any money from my freelance work - less than £5,000 a year - but I still have to fill in a long self-assessment form, sort out all my shares, investments, charitable giving, etc etc.

Last year was the first year I asked an accountant to help me out. It was like a burden had been lifted. I just had to give him my box file of financial information for 2014-2015, and he got it done in minute detail. I had no subsequent letter from Messrs Tax Grabbit and Fine (HMRC) telling me I’d either over paid or under paid.

Two years ago, HMRC told me they’d overcharged me £600, and paid this sum into my account. Later that year, it wrote again asking for it back. Evidently the Jim Henson Workshop is missing some of its characters and they’re working in Whitehall.