Questions of Cash

I have two private pensions, a civil service pension and another from a previous employer. Should I transfer all these to a single fund and start paying into that fund? Am I allowed to restart one of the private funds? ACT, Sunbury.

I have two private pensions, a civil service pension and another from a previous employer. Should I transfer all these to a single fund and start paying into that fund? Am I allowed to restart one of the private funds? ACT, Sunbury.

The pension specialist Peter Miller, at the adviser Hacker Young, and Simon Creeber of Glaisyers, say that while consolidating the funds may appear sensible, you would probably be best advised to maintain arrangements as they are. Advisers would suggest transfers only if they could be reasonably certain you would benefit from the change, and that certainty is unlikely.

Your two private pensions are probably money-purchase schemes. It is difficult to predict what these will pay you, which depends on many factors. There may be penalties imposed if you do transfer.

Your civil service pension is a final-salary scheme where the benefits are based on pensionable service and final pensionable salary, guaranteed by the Treasury. This is a secure pension arrangement which you should probably stay in.

While you may be able to restart contributions to one of your old private plans, this may not be advisable. Many older private plans do not comply with modern stakeholder-charging structures, and so can be more expensive. If you are employed you should try to join your employer's occupational pension scheme if possible.

If not, you should opt for a designated stakeholder plan. If you are self-employed or your employer has fewer than five staff you should consider establishing a stakeholder plan. You may need to take advice, ensuring the adviser has an advanced pensions qualification.

On advice from my IFA, Towry Law, I decided to invest £14,000 in a maxi-Isa. I drew a Halifax cheque from my savings account, but as it did not show my name Towry Law refused to accept it, saying this was a requirement of money-laundering rules. Halifax insists it is not.

There were 10 days when my money was not invested and earning interest, which I would like compensation for. JM, London.

There are often differences in interpretation of money- laundering regulations, but in this instance Towry Law's approach seems to be generally endorsed. Towry Law is adamant that it must identify the source of funds to satisfy money-laundering rules.

That view was supported by two other IFAs we spoke to and the British Bankers' Asso-ciation (BBA). Towry Law says its paperwork to you made clear your personal details must be printed on any cheque from a bank or building society, so compensation is not appropriate.

Halifax also declines to award compen-sation, saying it would have printed your account details on its cheque if you had asked. Your question illustrates a dispute between IFAs and some banks and building societies.

Nick Anderson, head of UK compliance at Towry Law, says: "Building societies [and former societies] have steadfastly refused to adopt a standard policy of printing the client's name and account details on their cheques, which has resulted in huge disruption to the industry in complying with money-laundering requirements." Jeremy Thorp, a BBA director, confirms this problem affects building societies and former societies and has been raised with the BBA by IFAs.

The Building Societies' Association (BSA) says it is trying to resolve the issue, which is subject to revised rules published last week. But the BSA says many members believe that for reasons of customer confidentiality they can only print personal details on a cheque when requested by the client.

I was sold an endowment policy in the early 1980s by a building society. In 1990 I was sold another endowment by an independent agent in Folkestone, who advised me to cash the existing endowment and take out a larger one with Norwich Union.

I have now been told by NU that I face a shortfall of £8,000. I was never told the endowment was share-based, or had any risk. What should I do?
JB, Folkestone.

From what you say, you appear to have the basis for a mis-selling complaint, on the grounds that you were apparently not advised of the risk attached to an endowment and because the decision to surrender a prior endowment may have caused you significant loss. It is unlikely to have been your best option, but may have earned the seller a lot more commission.

The agent who sold you your second endowment was not working independently, but employed by GN Bishop (Financial Services).

That company no longer trades and its business has been taken on by Aurora Financial Group under a deal specifying that Aurora takes no responsibility for any mis-selling which may have been conducted by Bishop.

The Bishop company is recognised as being in default by the Financial Services Compensation Scheme, which will provide compensation for any valid claim of mis-selling.

You should submit a claim to the FSCS, specifying both grounds for claiming. The FSCS helpline is 020 7892 7300.