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This is why the public is cynical about the industry

Why are the public so cynical about our industry? These examples illustrate the point.

I was recently approached by a 60-year-old single man who lives in rented accommodation. He has been unemployed since being made redundant four years ago. He wanted to take a loan from his pension as he is in dire financial straits. He cannot do this from an s32 policy and so wanted to transfer internally to a personal pension to proceed. Clerical Medical is charging an MVA of £4,000 even though the money will not be leaving the company.

Another client has a paid-up pension policy with Pearl. The current value is £10,478.50. The transfer value is £5,044 – less than 50 per cent. Pearl has kindly provided a maturity projection to age 60 (August 1, 2017). At an annual growth of 7 per cent and allowing for 2.5 per cent inflation so he can see what it might be worth in today&#39s terms, the figures are £9,070. He cannot transfer because of the punitive charges and if he leaves it because of the punitive charges it will be worth less than what it is worth today. Hobson&#39s choice, wouldn&#39t you say?

Another client has received notification from Jupiter showing the reinvestment of dividends on the ecology fund. The new units purchased are at an offer price despite the fact that she has already paid the initial charges when she invested. I cannot reduce the charges by waiving the commission because Jupiter does not pay any commission.

Finally, another client had a letter from Legal & General, informing her that as her 5 per cent income withdrawal on he with-profits bond exceeded the current bonus, an MVA would be levied on the difference. I have approached the above companies but have received no satisfactory answer. Perhaps they might like to reply through Money Marketing.

Gerard O&#39Boyle

Anstey Financial Planning,

South Molton, Devon


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