Hi,
I transferred a company pension to a standard life buy out bond approx 11 years ago. I happened to look at the historical annual value based on todays date and I find that for the first 5 years an "early encashment charge" is levied on the value of the fund... this is the first time I've become aware of this - I know little about pensions ect but intuitively it would suggest I withdrew my pension but apart from getting a yearly statement from standard life I've not ever taken a cent from it?
Does anyone know if this type of charge is part of the buy out bond? btw it called "standard life managed fund"
Thanks in advance
Thank you Marc! - The penalty is valid then even though I didn't encash the policy? the description of the charge is "early encashment charge" is confusing if that is the case.
Thank you Marc! - The penalty is valid then even though I didn't encash the policy? the description of the charge is "early encashment charge" is confusing if that is the case.
No. The penalty is irrelevant in your circumstances. It would only have applied IF you had cashed in your plan in the first five years. As you didn't do that, it wasn't applied to your Buy Out Bond.
No. The penalty is irrelevant in your circumstances. It would only have applied IF you had cashed in your plan in the first five years. As you didn't do that, it wasn't applied to your Buy Out Bond.
Thank you, looking at the historical valuation I assumed that it had been applied but as you point it hasn't been, red (negative) figures in the valuation just to show what the penalty would be if I chose to encash - I assumed the transfer value was the new fund value! I know better now...
Thank you, looking at the historical valuation I assumed that it had been applied but as you point it hasn't been, red (negative) figures in the valuation just to show what the penalty would be if I chose to encash - I assumed the transfer value was the new fund value! I know better now...
Yes it's a somewhat confusing aspect of the industry-standard Statements of Reasonable Projection (SORPs). If there are potential early exit penalties, they must be included in any projected values for the relevant years, even if the consumer has no intention of cashing in during the penalty period.