In the wake of with profits bonus cuts and the imposition of Market Value Reduction penalties, some insurance companies have been accused of applying penalties unnecessarily.
It is usually part of a with profits pension contract that no MVR will be charged on death or at the normal retirement date. However, some people that have deferred their normal retirement date and taking their pensions at a later date are now being hit with penalties.
If you are approaching the normal retirement date on your pension and are thinking of putting off taking the benefits, check whether deferring will leave you open to penalties. If this is the case, you need to weigh up taking the pension with and without the penalties.
Always seek independent financial advice - it could cost you around 30% of your pension pot.
Search the archive for other 'with profits' stories. Learn more about pensions in the Pensions Adviser.com.