I have DB scheme and thought about a transfer out. 3 IFA told me to stay. Potentially they could have had a tidy commission, that would have come with risk to their firms.
These days they get you to pay for their due diligence. Even then, they knew what the answer would be.
My cash transfer value was well into 7 figures BTW.
An IFA canât and wonât earn commission from pension related advice.
As above, even if they âknow the answer alreadyâ, if you want advice then due process has to be followed and they will charge you for it. Clearly they are not going to provide free advice!
A seven figure sum would presumably have taken you above the Lifetime Allowance limit? With tax consequences.
A DB pension is still notionally valued at 20x for LTA purposes, so should incur a lower or nil tax penalty.
Strangely not above LTA.
Iâve seen the CTV as an indication of how much itâs worth to get rid of me. Given the basis/benefits of my DB scheme.
A lot did leave. The early ones getting apparently good CTVs and entering draw down schemes. Layer ones not sering quite the returns the earlier ones got.
A mixed bag of advice here.
You just have to make your own decision based on your own circumstances. I used a company called CRS Consultants and they are based in Northwich.
Working life usually starts around 18-21 and from that moment everything suddenly changes to âcautiousâ. Thatâs generally why you have rich, average and poor. Of course this is an over simplification of careers, but you get my drift.
Being drip-fed any income by someone is not my idea of happiness. George Osborne came along and gave the public the biggest difference to the average personâs life that theyâve ever had.
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And yet people still donât get it.
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Thanks for the replies. I agree with @timmo1341 . Yes a lot if people have no interest in all the maths etc and need careful financial help. However, a fair few intelligent people (which I suspect most members of this forum are) are not only happy to manage their own financial affairs but actively do research and investigation as to their best options in retirement. I opened a dealing account with AJ Bell and have a portfolio of actively managed funds which are doing extremely well. I wish to open a Pension SIPP with them and have a similar portfolio. Yes the HSBC pension is relatively small but the transfer value is much higher. Bottom line is to leave it in the DB scheme I would be tossing away at least ÂŁ100,000. Would you wish to do that??. Plus with a combined pot of sensibly monitored funds has the potential for substantial growth. Yes, of course the default position is to stay but the job of the IFA is to evaluate, and recommend the appropriate action. Personally I do not need or want ongoing advice. Nothing to stop having ad-hoc paid for advice in the future but having to be locked in seems wrong to me. So right now there are very few IFAs who want to take this task on. For them it has become a poisoned chalice
As a LGPS pensioner Iâm so pleased I donât have to make these decisions and no IFA would ever suggest moving an LGPS pension. Or so Iâd hope! The idea of self investing hundreds of thousands of points, and knowing when itâs safe to eat into the capital if the pot wasnât generating enough to live on, would give me heebie jeebies. Iâm sure Iâm more than intelligent enough to do it, but I just wouldnât want to. The fact that money appears on the last working days of the month is hugely comforting.
There is a difference, I feel, between moving the whole pension from DB, and moving a smaller pot when you already have a solid pension in place. Itâs then a much easier and far less risky decision.
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Interesting, I may have to look into this.
I have a deferred DB pension, in the UK, following early years, post-graduation, working for ICL. It was 6 years of Pensionable service, in the â90s on a 1/60âs scheme, so 10% of my final salary on leaving. This wasnât that high in â98. This Pension starts paying out at 60, with no ability to defer until later. However I can take the benefit tax free, as l donât live in the UK, but still maintain a UK GBP account, after relocating to Ireland in â99.
In Ireland, I have 2 deferred DC pensions and one active with my current employer, with 6-figure pots in each, and growing 
As a non Irish domicile I donât get taxed on global income, as long it doesnât get remitted into the State. However I have never had income outside my Irish based employment to use this!
But that ICL, now a Fujitsu pension is showing a 6-figure transfer value, and to get me out of the scheme would probably be enhanced further. So do I leave it in, and take the Tax free Pension payments from 60, or take the Transfer and drop it into a UK GBP Pension or bring it over and consolidate with my other deferred Euro based pensions.
No Spouse to maintain, at present. Ex-Wife took clean payoff in early â00âs after returning to UK with our daughter (separate long and difficult story), so no Pension obligations or loss.
Open up a spreadsheet, and Pros/Cons list.
One of the key things IFA look into is whether you NEED the Pension to live off or whether you have other savings. If the former then there is little doubt they would recommend to leave a guaranteed income as is. Personally, I want to run the pension out. Sounds a little weird but why leave thousands of pounds over. If I to live past Eighties I would then have good saving/investments to pay for later life care - for me personally that is my aim. Therefore, thatâs why I would prefer to do my own thing and combine the DB with my DC pensions and have one sensibly managed pot diversified into various managed funds. Over the next few weeks I plan to talk to the IFA people listed on Money Advice Service Retirement Adviser Directory | Find a regulated financial adviser - there are only about 20 listed with Gold standard transfer qualifications which for the whole country is quite small
Absolutely, but thatâs a slightly different position to the one you adopted earlier! The OPâs point, with which I totally concur, is that the system is so unwieldy, inflexible and risk averse as to be nonsensical. The poster above advising ongoing, costly (and intrusive) financial âadviceâ as a matter of course, for a proportionately tiny DB liquidation must be industry connected. Independent? HmmmâŚ
Iâm in the same boat with a modest deferred Pension from the BBC in the 80âs and really want to control all my finances.
I tried using unbiased.co.uk but 1st person responded but wouldnât touch it, he advised no one else will touch it unless I want to loose 10% of the value.
In the end it may well need to remain as it is but will keep on trying!
Careful Nigel. You are beginning to describe a situation that others might consider amounts to a âgolden pensionâ ⌠
Why 10% of the value?
Not in my case. I transferred out in 2018, and now have total control over my cash. Benefits:-
- Flexibility. I can draw different amounts each month, if I wish.
- Flexibility. I will spend more now, in my 50âs than I will in my 80âs. in a DB scheme, pension income will be fixed (albeit, index-linked increased).
- I didnât pay any upfront fees (2018), but I think this may have changed,
- Death benefits. On death, all of my pot goes to the wife. In DB, it was only 50%.
- Protection of tax free lump sum.
- Enhanced transfer values.
Buying out was the best decision I made. The big potential downside of course is that you run out of cash (not the case with a DB scheme, which will pay out up to death. This is why these pension buyouts are becoming increasing regulated, to avoid people falling into retirement poverty. If you can justify that your pot will see you through, and donât get stung with fees, it is a no-brainier. I feel blessed to have been able to do it.
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Clearly itâs worked well for you, though itâs very much horses for courses. Itâs a huge decision for people and Iâm just pleased itâs one I donât have to make.
I agree 100%. Itâs worked for me, but everyoneâs circumstances are different and it is a huge decision which should not be entered into lightly.
I was having a little browse at companies that advise on these matters. On the front page of one it was talking about different sorts of DB pensions and one category was described as âunfunded LGPS pensionsâ. Such a thing does not of course exist. It may be a simple slip but it certainly made me question their competence. Iâve sent them some revised wording. Maybe they will reward me with a bottle of fine Burgundy, but somehow I doubt it.
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I totally agree with your comments @Andyblain . As I said previously the rules seem so stacked against db transfer these days that the IFAs appear to be almost hostile and ask huge fees