Pension frozen - I had no idea payments had stopped! What best to do?

[ArthurCucumber]

I have a private pension (Friends Life) that I set up in my 20s. I'm now 44 and the fund is currently about 30K. My contributions are paid as employer contributions through dh's limited company (which I work for, but dh handles the finances).

I've just received a letter from FL telling me that they wrote to me recently telling me contributions had been stopped, I had taken no action, and therefore my pension is now frozen. This is the first I had heard of anything.

It seems that two things have happened:

• The direct debit payment from the limited company to the pension bounced in August, due to a cashflow problem that dh didn't tell me about . (He has form on things like this, and whatever my future arrangements are, I am now going to be in charge of them.) Dh thought he had sorted this out and restarted payments, but somehow the direct debit didn't restart. (And clearly he didn't notice!)
• The letter that FL says they sent me didn't reach me. (I'm 100% sure of this.)

So my fund has been frozen, they'll still take fees, all previous quotations on my final pension value are now invalid, and I am without a current pension fund. Currently wondering what the feck I should do now.

Although I'll start by ringing FL and trying to restart contributions, I think I can't just "unfreeze" the pension in any sort of easy way - the FL letter says if I want to restart contributions I need to go back to my financial advisor.

As to restarting a new pension, would anyone have advice on whether I should start again from scratch and keep the FL pension frozen, or transfer out the 30K (presumably with big charges) and try to get something better? Not exactly au fait with current advice/arrangements, as I thought it was all ticking along in the background.

Questions possibly naive but this has just landed!

Not much advice, but do phone them directly. It may be simpler to restart than you think.

Agree with samels that it'll probably be easy to re-start, but I think the contact would have to come from your husband's company explaining that the August payment was missed in error and they wish to make payments to bring matters up-to-date and for your pension to be unaffected.

Thanks, samels - that's definitely Plan A as it would be simplest - but I reckon this is as good a chance as any for a bit of an audit!

The contract is out of date and you need to see if restarting it is actually the best thing to do. Phone them, ask them for:

List of all charges - AMC, Bid Offer spread, Annual fee, policy fee. (these days the only charges are the AMC)

Ask what charges are applied when you leave it frozen.

Ask specifically what penalties are applied if you move the money - transfer out. Many funds will be totally without charge, others such as withprofits may have a market value adjustment (that's a fee really)

Are you in a with profits fund? If get information on what style it is.

Is there Waiver of premium on the policy?

What funds are you invested in?

Get a breakdown of monies in each fund.

Are extra charges applied to any of the external funds? If not are they using mirror funds?

Number of funds available to the policy holder?

Any protection on values or guarantees on the contract?

If there are no penalties and plenty of charges >1%, no guarantees (on an annuity rate for example) then moving to a new contract and restarting payments could be your best bet.

Phew, notmadeofrib - thank you for that! All a bit bewildering but I will have a really good look through all that and write to them. One initial question arising: is it possible to move to a new contract after restarting payments (i.e. on a current, running pension) or can that only be done as part of the unfreezing process?

You are free to move a pension whenever, BUT some contracts will apply penalties. If you restart it then it won't actually change what you can do with it. Restarting will always be easy as they want your money and I'd put my money on that with a contract that old, you'll be paying for the pleasure. Do not restart and then not review this as a matter of urgency.

Just phone them though, don't send a letter into the abyss:

www88.friendsprovident.com/contactus/index.jhtml

The contact centre will answer all of those questions. Charges are the key thing, but never move anything if you may be giving up a good guarantee. If you are in withprofits, even with an MVR it's usually worth it as they are a bit of a waste of time these days.

Thank you very much indeed, NMRB. Looks like it is indeed a good idea to take this opportunity and have a good hard look at it.