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; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

    £16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

    SThree: Experienced Recruitment Consultant

    £20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

    Recruitment Genius: Collections Agent

    £14000 - £16000 per annum: Recruitment Genius: This company was established in...

    Day In a Page

    Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

    Cameron lowered the flag for the dead king of Saudi Arabia...

    But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Humanity must be at the heart of politics, says Jeremy Corbyn
    Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

    Joe Biden's 'tease tour'

    Could the US Vice-President be testing the water for a presidential run?
    Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

    Britain's 24-hour culture

    With the 'leisured society' a distant dream we're working longer and less regular hours than ever
    Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

    The addictive nature of Diplomacy

    Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
    Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

    Fashion: Ooh, Lady Chatterley!

    Take inspiration from DH Lawrence's racy tome with equally racy underwear
    8 best children's clocks

    Tick-tock: 8 best children's clocks

    Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
    Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

    Charlie Austin: ‘If the move is not right, I’m not going’

    After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
    Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

    The Arab Spring reversed

    Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
    King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

    Academic claims King Arthur was real - and reveals where he lived

    Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
    Who is Oliver Bonas and how has he captured middle-class hearts?

    Who is Oliver Bonas?

    It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
    Earth has 'lost more than half its trees' since humans first started cutting them down

    Axe-wielding Man fells half the world’s trees – leaving us just 422 each

    However, the number of trees may be eight times higher than previously thought
    60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

    60 years of Scalextric

    Model cars are now stuffed with as much tech as real ones