Questions of cash: How do I get the best deal as a widow?
Saturday 09 April 2005
Q. In a previous Questions of Cash, a widow said that if she had held with-profits bonds separately from her husband, she would not have had to pay a fee when she cashed it on his death.
Q. In a previous Questions of Cash, a widow said that if she had held with-profits bonds separately from her husband, she would not have had to pay a fee when she cashed it on his death. Our IFA rejected our claim he should have told us this and told us to merge our savings into a Standard Life self-invested personal pension. Is this sensible?
A. Market value adjustments (MVAs), also called market value reductions, are penalties that may be applied where a with-profits product is cashed in early. Some insurers do not apply these charges where the person holding the investment has died, but if an investment is jointly held and surrendered after the death of only one of the parties, a fee is payable.
Dennis Hall, of Carter Backer Winter Financial Services, says: "What is most likely to have influenced your IFA's decision in creating two separate policies or a joint policy maturing on the first or second death, was your intention regarding assets if one of you were to die. If it was your intention that all assets pass to the surviving spouse, then to avoid a forced maturity of the bond, it is common to arrange this on a joint-life, second-death basis."
Hall takes issue, though, with your IFA's suggested transfer to a self-invested personal pension. And he would not recommend Standard Life as a Sipp provider. "If you are not going to be selecting the investments in a Sipp - and with something as valuable as your pension you should really be leaving this to someone who is competent enough to do this - why would you want to go the Sipp route?" says Hall.
Hall believes Standard Life does not have sufficient experience of direct management of Sipps. And it has higher charges than rival providers.
He argues: "If you want to consolidate your pensions and want a modern cheaper contract, look for a stakeholder plan with access to external funds, such as Legal & General or Scottish Widows. "
Anyone taking advice from an IFA on pensions should ensure their adviser has passed their G60 specialist pensions qualification.
Q. I have a capped-rate mortgage with the Woolwich. The lender says the loan is portable and that there are no charges for "porting" it. When I recently moved house, however, Woolwich charged me for redeeming the mortgage. I have repeatedly asked the Woolwich to explain where in the contract it says that it can do this, but it says the charge is for setting up a new mortgage account
A. The explanation lies with some confusing use of language by Woolwich, part of the Barclays group. Woolwich clarifies that you can "port" your "product", but not your mortgage. This means the transfer of your capped rate is free, but there is a fee for the bank relinquishing its charge on your old property and registering a charge on the new home.
The bank now accepts it did not adequately explain the situation. It has agreed to pay half the administration fee and has sent you a cheque for £97.50.
Q. Is there any way to stop unsolicited credit card offers? I keep receiving offers from Capital One encouraging me to sign up for its credit card. But I do not want this plastic and these mailshots expose me to fraud. I have asked Capital One to take me off its mailing list but the offers keep coming.
A. Personally addressed unsolicited mail can be stopped by registering with the Mail Preference Service (MPS), either by phoning 0845 703 4599, or online at www.mpsonline.org.uk.
This will not prevent mail being delivered that does not contain a person's name, however, or mail from companies you have had previous contact with. It takes a few weeks for requests to the MPS to take effect.
* Questions of Cash is pleased to receive readers' letters, by e-mail to firstname.lastname@example.org or The Independent, 191 Marsh Wall, London E14 9RS. We cannot guarantee to respond to all letters and do not provide personalised advice. Please do not send original documents.
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