Tranferring Old Pension

ChrisSargent · 9 March 2017 at 3:50PM

I have managed to trace an old works pension with a transfer value of £126.5k
I now want to transfer it into my current pension so that it keeps working and earning but both the old scheme and my current provider tell me that I need to show that I have taken financial advice before they will let me do the transfer.
I have contacted a couple of IFA's and they want upwards of £950 to give advice and provide a letter as proof.
I am also in the process of trying to trace down 2 other old pension pots.
My questions are:
1. do I really need to prove I have had financial advice? and if I do..
2. am I better waiting until I can find the other old pots and doing it all in one go? or is there a limit on how much I can transfer in?
Thanks in advance

Chris

sandsy · 9 March 2017 at 4:15PM

1. Yes, you do - advice is required by law as such a transfer is considered high risk and not suitable for the majority of people. Advice not to transfer doesn't prevent you from transferring but can make it harder, especially if the adviser won't act for you when he considers it's not in your best interests.
2. Are your other pensions final salary pensions? Irrespective, you probably need info on all your retirement plans to get proper advice.

It sounds like this pension isn't a pot of money in the way you think it is. It's actually a promise to pay you a fixed level of income at a specific age. And inbuilt in that promise will be inflationary increases of one sort or another so that the promised income increases each year before you take it and after, so it is still working for you and adding value.

That promise provides you with a degree of certainty that is lost if you transfer. Then you become responsible for making investment returns and making the funds last your lifetime. But some people like that control and are comfortable to take that risk on. Advice will help you find out if you're one of those people.

ChrisSargent · 9 March 2017 at 4:33PM

Thanks for the quick reply.

None of the pensions are final salary.

CBX1985 · 9 March 2017 at 4:48PM

I suspect the £950 for the transfer would be for the research as to whether it is transferred with no guarantees they'll agree. The transfer itself would likely cost you £3,000 minimum. I wouldn't do a £30k one for that. The paperwork and risk involved is immense.

ChrisSargent · 9 March 2017 at 5:12PM

CBX1985 wrote: »

I suspect the £950 for the transfer would be for the research as to whether it is transferred with no guarantees they'll agree. The transfer itself would likely cost you £3,000 minimum. I wouldn't do a £30k one for that. The paperwork and risk involved is immense.

No, the £950 is for basic (!) pension transfer advice for money purchase/ DC schemes and would consider a number of factors to determine if transferring the old pensions would be recommended ( so he said )

The transfer value of the pension is £126,500

xylophone · 9 March 2017 at 5:20PM

The pension has no safeguarded benefits?

If not, and this is a basic money purchase transfer, I am at a loss to understand the advice requirement.

http://adviser.royallondon.com/technical-central/pensions/transfers/safeguarded-benefits/

ChrisSargent · 9 March 2017 at 5:37PM

There is a GMP

xylophone · 9 March 2017 at 5:49PM

There is a GMP

That is a safeguarded benefit.

What type of scheme was your old pension?

http://www.mycompanypension.co.uk/What-is-a-Money-Purchase-Scheme-with-a-Defined-Benefit-Underpin-Pensioner-Members-DB

http://www.mycompanypension.co.uk/What-is-a-Defined-Benefit-Scheme-Pensioner-Members-DB

xylophone · 9 March 2017 at 5:52PM

See also

https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/

https://www.barnett-waddingham.co.uk/comment-insight/blog/2012/07/24/revaluation-for-early-leavers/

Have you obtained a new state pension statement?

https://www.gov.uk/yourstatepension?utm_source=Mail-Online&utm_medium=Partnership&utm_campaign=GTKY

sandsy · 9 March 2017 at 6:02PM

ChrisSargent wrote: »

There is a GMP

Is it a S32?

CBX1985 · 9 March 2017 at 6:09PM

Apologies, Chris. I missed 'defined benefit' comment - doing five jobs at once

What was the value of the GMP?

Tranferring Old Pension

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