Why can’t I cash in my pension?

“Why can’t I cash in my £10,000 pension?” is the question asked by a Daily Telegraph reader, in their “Jessica Investigates” section today.

Reader, John Davis asks –

“After spending 25 years in the pensions and life assurance industry, I ceased working in the field at the age of 50… By then I had accumulated various pension plans with different life offices: some from company schemes, others from self-employment. My wife and I also moved to a different area because of a job promotion…Later, after acquiring a degree, I taught in adult education for 10 years until I retired aged 65. Since I was by then out of date about pensions, I asked a financial adviser to deal with realising my pension policies. However, one policy was overlooked.”

The Telegraph’s consumer adviser, Jessica Gorst-Williams investigated the issue, and replies

“When you found out about it, just before your 75th birthday, pension legislation was changing…. Time and again when you tried to cash in the plan, Phoenix Life, which it was now with, thwarted you. This was partly because from the outset Phoenix had insisted that, as the policy contained a guaranteed annuity rate (which compared very well with standard annuity rates), you must first take financial advice…. Only when I became involved did it appreciate that the plan’s value put it well below the £30,000 threshold for needing an adviser’s opinion…. For the trouble and upset this had caused you Phoenix Life offered £300. Using a claim form it had received from you in 2015, and after some issues with paperwork were unravelled, you received its £10,313 value…. Phoenix has now paid 8pc late payment interest, which after tax is £995, and £50 for the extra inconvenience. The total received is £11,658.”

If you would like to ask Jessica for help, you can contact her at the Telegraph, via this page.