Pension jargon help please for elderly dad!

[DaysofHoney]

Evening everyone,

Firstly, thanks in advance to anyone who can help - the pensions world is a minefield to me, but I’m trying to help my dad urgently access his funds in order to pay for much needed private care.

• He has two private pensions, one small, and one slightly larger (recently transferred the latter to a new provider via an IFA, which he is trying to drawdown from now).
• IFA has requested the following information relating to the smaller pension - (the one they did not transfer):

1. % LTA used off platform prior to Age 75
2. % LTA used off platform by the Age 75 test which were vested benefits
3. % LTA used off platform by the Age 75 test which were not vested benefits
4. Has the member received any PCLS since 75 and if so how much
5. Has the client used any LSA/LSDBA since 06/04/2024
6. Has the member received PCLS after 75, but before 06/04/2024

Dad is suffering post surgery and radiotherapy and is also losing his marbles. He is no idea what any of this even means. Will he find the answers in his statements? He emailed a similar request earlier this year (enquiring about any LTA used to date), and got the following response:

“Your crystallisation date was August 2002. As LTA was not brought into effect until 2006/2007, this Benefit Crystallisation Event (BCE) is classed as pre A Day. Pre A Day BCEs were not included in LTA (now replaced by LSA).”

Is this a really long winded way of saying the answers to the questions above are basically N/A, or “nil”? I am massively overwhelmed and confused.

Many thanks in advance to anyone that got this far and can help!

I can't help, but I think it's terrible that they use technical jargon to non-pension experts.

I hope someone can help you 🤞

Thanks, and yes, we were both really bewildered by the email requesting this information. I have a pension but it’s civil service and I’m some way of retirement so none of this means anything to me! I have googled and I’m really none the wiser either!

The IFA should be able to explain all that to you.

From the correspondence from the email it appears as though the questions the IFA has asked aren’t relevant to that specific pension, but let the IFA know the response and they should be able to confirm.

And if they can’t, that’s a red flag and find another IFA.

I’d go back to the IFA and ask them who would be able to give you that info. Who was the pension with prior to moving it to the IFA? They should have an admin team that can help. Someone will have been keeping records!

They are asking these questions in relation to the pension that they didn’t transfer (it’s with AEGON).

I am not an expert but have a small amount of knowledge so could try and help unpick this - or at least unpick it enough that you can provide his IFA enough information that they can work the rest out themselves!

Other than these two private pensions, has he ever had any other pensions excluding his state pension (either pension 'pots' like his current two, or final salary pensions)?

Thanks so much, no others, just these two and his state pension.

They are essentially asking about historic draw downs of pension. These are "Benefit Crystallisation Events" and historically any time a BCE happened it was tested against the lifetime allowance (LTA) to work out if any tax charge was due.

The LTA has now been abolished but had been replaced with two other allowances which test pension lump sums received over the individuals life and death benefit lump sums (which don't apply here since your father is alive). These new allowances are stupidly complex and I still haven't got my hands around them.

I think you need to speak to the IFA. What they have sent is absolutely shocking and unhelpful. I suspect they are asking both about your father's other pension plan and any withdrawals from the one has has transferred which have taken place before now so they can work out where you stand in relation to the new allowances. I'm not at all clear on why they are asking about LTA issues though!

It IS shocking isn’t it?!

And he can’t access his funds until he gets the answers to them!

He has drawn down from his other, smaller pension, but always opted to pay tax on any drawdowns. So again, I think the answers will be ‘nil’?

No drawdowns ever from the current plan he is trying to access now, it was a surprise to him.

I cant help you with the pension stuff, but am slightly concerned that your DF thinks he needs to drawdown from his pension to pay for care. Has he had a needs assessment that states what care he needs? If so, he should also have a financial assessment to determine what he should pay towards any care he needs. This will only take into account his monthly pension payments whether state of private, and any savings he has over a certain amount. He would not be expected to cash in his private pension to pay for it.

Not necessarily, depends a bit on whether he took those benefits before or after 6 April 2006, and whether he has reached age 75 with untaken benefits from either arrangement .

Definitely speak to the IFA and ask them to translate that lot into English. Ask them specifically what you need to request from the scheme administrator of the other scheme.

In a roundabout way, they are basically asking for the dates he has accessed his pensions, and the amounts he took on those dates. If they have that information, they should be able to work the rest out themselves. Is there any option to give the IFA authority to contact Aegon themselves to get this information? That would be the easiest option if they are willing/able to do this, and it is all information that Aegon should have access to.

Do you have involvement with the IFA and are they aware that your dad is in a bit of a vulnerable position and that you are also getting quite stressed out by it? I think they should be taking a more active approach to getting hold of this information particularly as your dad is having health issues.

It is hard without knowing all the details, but if the IFA can't/won't speak to Aegon for you, I would ask Aegon for a statement showing all the dates your dad accessed his pension and how much he took on those dates; a statement showing every time his pension was crystallised (crystallised basically means he took tax-free cash/PCLS from it), including the date and how much was crystallised; and then, if he is over 75, ask them to confirm if he was tested against the LTA at 75, and how much LTA he used up.

Thanks very much everyone, I’ll certainly go back to the IFA tomorrow. Unfortunately dad can’t communicate verbally anymore as a result of his surgery, so I’m trying to do this on his behalf.

Regarding lying for his care, he’s been assessed and social care was put in place but it’s simply not enough. He needs someone in twice a day, and I live overseas.

Paste everything into chatGPT & get it to explain

This is a GREAT idea

We do it for everything. Even decisions we can’t make

Chat has just absolutely smashed the answer to this and provided me with a brilliant response to the IFA. Amazing - thanks so much for the suggestion!

Just be a bit careful as it will hallucinate if it can’t find out the answer.

Your IFA is being a bit useless just talking jargon.

Dear IFA

Please provide a letter of authority that we can sign so that you can request this information directly from Aegon. We do not feel sufficiently confident to provide the answers ourselves.

KR

Is what I would write. No IFA should be using that kind of language with a client.

Just pass on the response to the IFA - what is the issue - they will understand.

It explains that your dad only accessed his pensions before certain restrictions came in and therefore he still has all allowances available as currently stand.

They’re basically asking for dates and amounts of any pensions that dad has drawn from pension providers. A PCLS is a pension commencement lump sum which would be his typical 25% tax free lump sum he would have drawn from a final salary pension.
If dad has drawn any pension from other providers and you have paper work it will say on it x% of lifetime allowance (LTA) used.

I would just go back to the IFA with the information and say here you go or ask them to approach the pension companies themselves for the info.