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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15976
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Hi, I have a pension policy with LV which matures in June.

Customer Question

Hi, I have a pension policy with LV which matures in June. It is only £24K and under the governments change of pension policy I can withdraw it under the 'Trivial Commutation' rules;
LV agrees with this but won't do it without instruction from a financial advisor.
I resent paying £500 just for some-one to write a letter.
Do I really need this ?
Best regards, J.M.Firth.
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.



I'm not aware of any legal requirement that says that a pension plan holder has to seek independent financial advice before they can cash in a small pension pot though it is a good idea. I know numerous people who claim to have done it without using an IFA. It may be LV's policy to make plan holders consult an IFA so they are covered in any dispute. I know some companies only sell pensions and othher financial products though IFAs for legal reasons.


From April 2015, free financial advice will be available but that doesn't help you now. For a definitive legal answer, you might call The Pensions Advisory Service through their website here. The Financial Conduct authority (FCA) has published guidance for pension plan providers and financial advisers in light of the new pension rules and you can read those here. The page here would certainly suggest that you are not legally bound to take advice from an IFA.


I hope this helps but let me know if you have any further questions.