An adviser has slammed Standard Life for applying a 26 per cent market value reduction on the with-profits holdings of a client who has reached his nominated retirement age.
Bates Investment Services adviser Alan Drysdale says unless the client, who wants to transfer the fund, annuitises or takes a tax-free lump sum and moves into drawdown, he will lose £120,000 of his pension pot.
Drysdale has written a letter of complaint to Standard, accusing it of not treating its customers fairly.
He says that he will take the matter to the Financial Ombudsman Service if the life office does not change its stance on the issue.
He says: “I have never heard about anything like this since the Equitable Life days. My client has reached their NRA and does not want to take the tax-free cash. The only other option is a drawdown contract, which means that if they die the assets get taxed.”
Standard Life spokesman Paul Keeble says the market value reduction only applies on switches and phased drawdown.
He says: “MVRs vary acc-ording to the type of policy, period of investment and payment history. The crux here is the distinction between taking an investment decision and taking a retirement decision at or past the normal retirement age, hence the different treatment of MVRs for the options.”