Questions of cash: Advice cost exactly what it saved us


Q. My wife and I have a pension policy with Allied Dunbar. On the advice of our IFA, we made a fund switch within the policy and were charged almost £180 for this, despite 30 years of trouble-free and low-cost custom. This wipes out the advantage of switching funds.


MP, Staffordshire.

Q. My wife and I have a pension policy with Allied Dunbar. On the advice of our IFA, we made a fund switch within the policy and were charged almost £180 for this, despite 30 years of trouble-free and low-cost custom. This wipes out the advantage of switching funds.
MP, Staffordshire.

A. Zurich has confirmed its right to levy this charge and declines to waive it. Your IFA should either have checked whether the fund move would lead to a charge, or else warned you to check for this before you gave the instruction. You appear to have good grounds for asking the IFA to meet these costs, but as you have chosen not to give us the name of the IFA - because he is a friend - there is nothing more we can do.

Q. My son has taken up a teaching post in Austria for three years. What should he do about his teacher's pension? He has 18 years' service and his pension contributions are held in abeyance until he makes a decision - which he must do within six months. If he continues to make payments, he thinks he will have to cover the employer's contributions, but if he does not, this may cause problems if he returns later to teach in the UK.
CB, Hertford.

A. Donna Bradshaw, a pensions specialist at adviser IFG, says: "Your son can continue to pay contributions for up to six years while he is teaching outside the UK. He will have to pay both employee and employer contributions - known as combined contributions. The total current rate is 19.5 per cent of the notional salary notified by the former employer, or that estimated to have been the contributable salary if pensionable employment had continued.

"Whether he should take this option depends on whether he can afford to pay the contributions and if he has the option of joining a pension scheme in Austria. The UK teacher's pension is an excellent scheme, offering high levels of guaranteed benefits. If there is no scheme available or it can't match the benefits he would get from the UK, I would recommend he remain in the scheme.

"If he stays in the scheme and pays combined contributions, he should make an election on Form 160, which is contained in the Leaflet 721 or which can be downloaded from www.teacherspensions.co.uk."

Q. In 1989 I was sold a Scottish Widows endowment policy by estate agent Slater Hogg & Howison, which is now projected to produce a shortfall on my mortgage of £9,200. I complained of mis-selling - on the basis I was not informed of the risk of a shortfall - to Bradford & Bingley, which now owns Slater Hogg & Howison. While Bradford & Bingley agreed my complaint, it has only paid me £1,800, on the basis that I have other endowments which have over-performed. I am sure that if the other endowments had under-performed, they would not be offering to pay compensation.
JO, Glasgow.

A. The reduction in compensation is not related to your having held other endowments, but to the fact that you used the lump sums obtained on their maturity to reduce the amount owed on your mortgage. This reduces the amount of compensation to which you were entitled. This may seem unfair, but it is approved by the Financial Ombudsman Service. As you accepted the offer and have received payment, you are not in a position to appeal.

Q. I instructed Halifax's share dealing service to sell nearly 5,000 units in Standard Life's UK Equity High Income Trust. When I phoned I was quoted a price of 54.24p per unit, but on the contract note the price was 46.28p. I have lost £400 as a result.
MR, Stockton-on-Tees.

A. Unit trusts are settled at noon each day. Prices quoted are for guidance only, being the previous day's settling price. In your case, the price fell by the following noon and you lost as a result. If you had traded directly with Standard Life, it would have given you the prevailing price and you would have avoided the Halifax's fee.

* If you have any queries, write to: Questions of Cash, The Independent, 191 Marsh Wall, London E14 9RS, or e-mail: cash@independent.co.uk. Please send copies, not originals.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Life and Style
The new Windows 10 Start Menu
tech
News
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete today
Arts and Entertainment
There has been a boom in ticket sales for female comics, according to an industry survey
comedyFirst national survey reveals Britain’s comedic tastes
Arts and Entertainment
Ed Sheeran performs at his Amazon Front Row event on Tuesday 30 September
musicHe spotted PM at private gig
PROMOTED VIDEO
Arts and Entertainment
Mystery man: Ben Affleck and Rosamund Pike in '‘Gone Girl'
films... by the director David Fincher
Arts and Entertainment
Hilary North's 'How My Life Has Changed', 2001
books(and not a Buzzfeed article in sight)
News
Kim Jong Un gives field guidance during his inspection of the Korean People's Army (KPA) Naval Unit 167
newsSouth Korean reports suggest rumours of a coup were unfounded
News
people'I’d rather have Fred and Rose West quote my characters on childcare'
Life and Style
stoptober... when the patch, gum and cold turkey had all failed
Travel
Bruce Chatwin's novel 'On the Black Hill' was set at The Vision Farm
travelOne of the finest one-day walks you could hope for - in Britain
Arts and Entertainment
Gay and OK: a scene from 'Pride'
filmsUS film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
News
people
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Trust Accountant - Kent

    NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

    Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

    £18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

    Law Costs

    Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

    Day In a Page

    Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

    The children orphaned by Ebola...

    ... then rejected by surviving relatives over fear of infection
    Pride: Are censors pandering to homophobia?

    Are censors pandering to homophobia?

    US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
    The magic of roundabouts

    Lords of the rings

    Just who are the Roundabout Appreciation Society?
    Why do we like making lists?

    Notes to self: Why do we like making lists?

    Well it was good enough for Ancient Egyptians and Picasso...
    Hong Kong protests: A good time to open a new restaurant?

    A good time to open a new restaurant in Hong Kong?

    As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
    Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

    Paris Fashion Week

    Lagerfeld leads a feminist riot on 'Boulevard Chanel'
    Bruce Chatwin's Wales: One of the finest one-day walks in Britain

    Simon Calder discovers Bruce Chatwin's Wales

    One of the finest one-day walks you could hope for - in Britain
    10 best children's nightwear

    10 best children's nightwear

    Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
    Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

    Manchester City vs Roma

    Five things we learnt from City’s Champions League draw at the Etihad
    Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

    Trouble on the Tyne

    Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
    Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

    Isis an hour away from Baghdad -

    and with no sign of Iraq army being able to make a successful counter-attack
    Turner Prize 2014 is frustratingly timid

    Turner Prize 2014 is frustratingly timid

    The exhibition nods to rich and potentially brilliant ideas, but steps back
    Last chance to see: Half the world’s animals have disappeared over the last 40 years

    Last chance to see...

    The Earth’s animal wildlife population has halved in 40 years
    So here's why teenagers are always grumpy - and it's not what you think

    Truth behind teens' grumpiness

    Early school hours mess with their biological clocks
    Why can no one stop hackers putting celebrities' private photos online?

    Hacked photos: the third wave

    Why can no one stop hackers putting celebrities' private photos online?