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Should I transfer out an old employer pension ?

FIRSTTIMER
FIRSTTIMER Posts: 637 Forumite
in Pensions, annuities & retirement planning
Hi,


I currently have an old defined benefit pension with a previous employer with a CETV value of approx. 60k. This pension I have built up increases by CPI and RPI up a max of 5% each year. Is it wise to leave it where it is or should I be investing it into some private scheme? I have a new pension with a new employer that doesn't allow transfers in...


Thanks,
«1

Comments

  • Tcquins
    Tcquins Posts: 65 Forumite
    You!!!8217;ll need to get advice from a financial adviser/IFA.

    It all depends on your circumstances as to whether it would be beneficial and whether the transfer is !!!8216;good value!!!8217;.

    Giving up a guaranteed inflation proofed income in retirement is not to be done on a whim.

    I think you will struggle though given the value because most IFAs will have a minimum floor with DB advice. Most likely £2k plus, with possibly £1k chargeable whether they advise it can go ahead or not. This quickly makes the transfer less valuable to you- and often a non-starter.
  • Alexland
    Alexland Posts: 10,561 Forumite
    Eighth Anniversary 10,000 Posts Photogenic Name Dropper
    I agree you are required to use an IFA but that will be expensive. Without understanding if you have unique circumstances I don't see the harm in leaving it alone and using it as the foundation of your other pension provision.
  • cloud_dog
    cloud_dog Posts: 6,420 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    FIRSTTIMER wrote: »
    Hi,


    I currently have an old defined benefit pension with a previous employer with a CETV value of approx. 60k. This pension I have built up increases by CPI and RPI up a max of 5% each year. Is it wise to leave it where it is or should I be investing it into some private scheme? I have a new pension with a new employer that doesn't allow transfers in...


    Thanks,
    So as to be able to try to put some perspective around your query, what is the annual pension at normal retirement age?
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • Brynsam
    Brynsam Posts: 3,643 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper Combo Breaker
    cloud_dog wrote: »
    So as to be able to try to put some perspective around your query, what is the annual pension at normal retirement age?

    ...and how old are you now/what is the scheme's retirement age?
  • xylophone
    xylophone Posts: 45,945 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    https://www.royallondon.com/Global/documents/GoodWithYourMoney/COMPANY-PENSIONS-FIVE-REASONS-TO-TRANSFER-OUT-AND-FIVE-REASONS-NOT-TO.pdf
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    10,000 Posts Fifth Anniversary Name Dropper Photogenic
    FIRSTTIMER wrote: »
    Hi,


    I currently have an old defined benefit pension with a previous employer with a CETV value of approx. 60k. This pension I have built up increases by CPI and RPI up a max of 5% each year. Is it wise to leave it where it is or should I be investing it into some private scheme? I have a new pension with a new employer that doesn't allow transfers in...


    Thanks,

    Without knowing what pension this buys no answer is possible !

    We dont know if the pension will be £1 a year (if so, transfer out), £10k a year (if so, keep it) or something in between and if so, how much and at what ages. Or what age you are now and when you'd like to retire.
  • FIRSTTIMER
    FIRSTTIMER Posts: 637 Forumite
    Hi,


    Thanks for this...its currently stands as this....


    CETV Value - 60k


    Age 31


    Retirement at 55
    £15k and pension of £3k per year or £5.5k per year. Its a defined benefit scheme increase maximum of cpi/rpi up to max of 5%.


    I only requested a 55 retirement quote.
  • mgdavid
    mgdavid Posts: 6,711 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    FIRSTTIMER wrote: »
    Hi,


    Thanks for this...its currently stands as this....
    CETV Value - 60k
    Age 31
    Retirement at 55
    £15k and pension of £3k per year or £5.5k per year. Its a defined benefit scheme increase maximum of cpi/rpi up to max of 5%.

    I only requested a 55 retirement quote.

    Please confirm what the Scheme Normal retirement age (NRA) is.
    The questions that get the best answers are the questions that give most detail....
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    10,000 Posts Fifth Anniversary Name Dropper Photogenic
    You could never sustain £5.5k a year from a lump sum of £60k (or alternatively £3k from £45k) let alone with up to 5% increases figured in.
  • Alexland
    Alexland Posts: 10,561 Forumite
    Eighth Anniversary 10,000 Posts Photogenic Name Dropper
    For the average person that scheme looks like it should not be changed. You might struggle to find an IFA at any cost who would want the liability from being involved in transfering that scheme out unless you have very special circumstances.
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