With-profit penalties complicate Protected Rights transfers

clock

Clients are being urged to seek advice before moving Protected Rights money out of with-profit funds and into a SIPP as exit penalties introduced last week could significantly reduce the value of their pots.

Research conducted by Fidelity FundsNetwork found a third of people were keen to move their money from life insurance funds and into a SIPP following changes to the rules in October. A large proportion of the £100bn of protected rights money especially that held by older investors will be in with-profits; the funds were one of the main options when contracting out on a money purchase basis became effective from April 1988. However, following the recent market turmoil, insurers including Friends Provident and Norwich Union have introduced MVRs (market value reductions) on their with-prof...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Pensions

British Steel a stark reminder of obligations around client files

British Steel a stark reminder of obligations around client files

Lawyer Philippa Hann reflects on her work around the pensions case

Hope Coumbe
clock 27 March 2024 • 2 min read
SSAS and the general levy: A victory for common sense

SSAS and the general levy: A victory for common sense

The value of SSASs after general levy consultation outcome

Caitlin Southall
clock 26 March 2024 • 5 min read
Pension dashboard operators join forces to push project forward

Pension dashboard operators join forces to push project forward

Coalition aims to bring 'dashboards to consumers as early as possible'

Jasmine Urquhart
clock 25 March 2024 • 2 min read