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  • FIRST POST
    • Pixbach
    • By Pixbach 7th Sep 17, 9:09 PM
    • 1Posts
    • 0Thanks
    Pixbach
    Pension Pot
    • #1
    • 7th Sep 17, 9:09 PM
    Pension Pot 7th Sep 17 at 9:09 PM
    I have a pension pot of around £500,000,through the electrical supply industry, that I have been paying into for 29 years.I am aware that I cannot cash in until I am 55 for a monthly income,I am 46 at the moment.Can I withdraw this pot and invest it elsewhere for upto 10 years,if so what would be my best bet ?
Page 1
    • dunstonh
    • By dunstonh 7th Sep 17, 10:02 PM
    • 89,530 Posts
    • 54,981 Thanks
    dunstonh
    • #2
    • 7th Sep 17, 10:02 PM
    • #2
    • 7th Sep 17, 10:02 PM
    .I am aware that I cannot cash in until I am 55
    Any thought of cashing that in would make you a nut case.

    Can I withdraw this pot and invest it elsewhere for upto 10 years,
    yes and no. You cannot withdraw the pension. However, you can transfer it, subject to IFA advice and invest it if its a sensible thing to do.

    if so what would be my best bet ?
    If you cant answer that then its probably best that you dont.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • ewaste
    • By ewaste 7th Sep 17, 10:36 PM
    • 22 Posts
    • 14 Thanks
    ewaste
    • #3
    • 7th Sep 17, 10:36 PM
    • #3
    • 7th Sep 17, 10:36 PM
    Is the pension Defined Benefit or Defined Contribution?
    • bostonerimus
    • By bostonerimus 7th Sep 17, 10:49 PM
    • 879 Posts
    • 443 Thanks
    bostonerimus
    • #4
    • 7th Sep 17, 10:49 PM
    • #4
    • 7th Sep 17, 10:49 PM
    You need to tell us a lot more. Please describe your pension in detail.
    Misanthrope in search of similar for mutual loathing
    • xylophone
    • By xylophone 7th Sep 17, 11:05 PM
    • 22,881 Posts
    • 13,243 Thanks
    xylophone
    • #5
    • 7th Sep 17, 11:05 PM
    • #5
    • 7th Sep 17, 11:05 PM
    through the electrical supply industry
    A Defined Benefit pension?

    On these lines?

    http://www.enwl.co.uk/docs/ENWL-Pensions/db-member-guide

    Do you have your own section's booklet?

    Have you read it and do you understand your benefits?

    https://www.moneyadviceservice.org.uk/en/articles/transferring-out-of-a-defined-benefit-pension-scheme

    https://www.royallondon.com/Global/documents/GoodWithYourMoney/COMPANY-PENSIONS-FIVE-REASONS-TO-TRANSFER-OUT-AND-FIVE-REASONS-NOT-TO.pdf
    • K_E_A
    • By K_E_A 13th Sep 17, 11:13 PM
    • 2 Posts
    • 0 Thanks
    K_E_A
    • #6
    • 13th Sep 17, 11:13 PM
    • #6
    • 13th Sep 17, 11:13 PM
    Hi there

    I'm in a Defined Benefit Pension Scheme in the electricity industry. I'm 55 and waiting for my transfer quote. It's my intention to retire early on receipt and work part-time for myself.

    My pension scheme administrators have advised they only need the official confirmation (letter of authority etc) that I have consulted with a Financial Advisor and even if a transfer is not recommended, if it's still my express wish to do so, I can do (once I've given 60 days notice to leave the scheme). But the majority of Financial Advisors I've enquired with are insisting they will only work with me if they do make a recommendation and that more often than not, they will always advise against it. (Hargreaves Landsdown for example). Some offer initial advise for free, others charge a lot.

    So I'm looking for recommendations for companies/IFA's who do not insist on a positive recommendation to transfer. Not looking to make rash decisions either, but also not looking to waste time and money with those who won't/can't accommodate this from the outset.

    Many thanks for any advice, much appreciated
    • sandsy
    • By sandsy 14th Sep 17, 7:30 AM
    • 1,176 Posts
    • 679 Thanks
    sandsy
    • #7
    • 14th Sep 17, 7:30 AM
    • #7
    • 14th Sep 17, 7:30 AM
    Whilst a financial adviser can take your preference to transfer into account, they are obligated to investigate the reasons for that preference as well as to gather information about all your personal circumstances.

    The latter will include health and financial information, such as current and future outgoings, all sources of income available to meet those outgoings, your attitude and ability to bear investment risk, your general attitude to having a certain income for life, your ability to cope with flexible income, the likelihood of dipping into and out of a flexible pot and running out money etc.

    If all the things they discover about you indicate that you're likely to be in a better financial position staying in the DB scheme, then despite your wish, they'll generally be obliged to recommend you stay put.
    • dunstonh
    • By dunstonh 14th Sep 17, 10:25 AM
    • 89,530 Posts
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    dunstonh
    • #8
    • 14th Sep 17, 10:25 AM
    • #8
    • 14th Sep 17, 10:25 AM
    Some offer initial advise for free, others charge a lot.
    No-one does advice for free. Most IFAs will offer an initial meeting free of charge but no advice is given in that meeting.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • Silvertabby
    • By Silvertabby 14th Sep 17, 10:44 AM
    • 1,529 Posts
    • 1,819 Thanks
    Silvertabby
    • #9
    • 14th Sep 17, 10:44 AM
    • #9
    • 14th Sep 17, 10:44 AM
    Beware of the firms offering 'free' advice - they will 'recommend' the transfer in return for a chunk of your transfer value.
    • xylophone
    • By xylophone 14th Sep 17, 10:48 AM
    • 22,881 Posts
    • 13,243 Thanks
    xylophone
    My pension scheme administrators have advised they only need the official confirmation (letter of authority etc) that I have consulted with a Financial Advisor
    No skin off their noses if you go.....


    http://forums.moneysavingexpert.com/showthread.php?p=73120599#post73120599

    See post 3.

    As you have discovered, some pension schemes will not accept a transfer without a positive recommendation.
  • jamesd
    Your original scheme is required to ensure that you have received advice. No surprise that advisers will insist on providing advice, since they know that you are required to get advice.

    You're then free to ignore the advice. Some advisers apparently will refuse to say you have received advice if you don't want them to do the transfer work (and charge for it). Others may refuse to say you've received advice if their advice is not to transfer.

    Under current rules advisers are required to do things like assuming you'll buy a lifetime annuity with the whole pot even though that's an inappropriate product for early retirement, where your need will be drawdown until state pension age then if you're normal, state pension and gradually reducing income need for the rest of your life. This standard analysis is also required to assume investment growth that is well below historic levels.

    In essence, the mandated analysis is rigged to make transferring look bad and it'll suggest bad when it's really good.

    Advisers can add to this and explain why that standard is not applicable to your circumstances. Ensure that you give them sufficient information to do so, like that summary of likely income changing need that I gave.
    • sandsy
    • By sandsy 14th Sep 17, 1:08 PM
    • 1,176 Posts
    • 679 Thanks
    sandsy
    You're then free to ignore the advice. Some advisers apparently will refuse to say you have received advice if you don't want them to do the transfer work (and charge for it). Others may refuse to say you've received advice if their advice is not to transfer.

    Under current rules advisers are required to do things like assuming you'll buy a lifetime annuity with the whole pot even though that's an inappropriate product for early retirement, where your need will be drawdown until state pension age then if you're normal, state pension and gradually reducing income need for the rest of your life. This standard analysis is also required to assume investment growth that is well below historic levels.

    In essence, the mandated analysis is rigged to make transferring look bad and it'll suggest bad when it's really good.

    Advisers can add to this and explain why that standard is not applicable to your circumstances. Ensure that you give them sufficient information to do so, like that summary of likely income changing need that I gave.
    Originally posted by jamesd
    What rubbish. The comparison against an annuity is just one part of the advice. And one which has largely been blown out of all proportion by TVAS software providers. Consequently, far too many advisers focus only on the critical yield and the regulator has said as much.

    At the end of the day, the requirement is for suitable advice. If a transfer to a drawdown is suitable, then the advice should be able to demonstrate why this is the case, irrespective of the annuity comparison.
    • atush
    • By atush 14th Sep 17, 1:27 PM
    • 16,246 Posts
    • 9,917 Thanks
    atush
    Do you have a spouse and dependents? Are you familiar with the death benefits of your scheme?

    Do you have any experience in investing, such that you think you can do better than a guaranteed indexed pension?
  • jamesd
    What rubbish. The comparison against an annuity is just one part of the advice. And one which has largely been blown out of all proportion by TVAS software providers. Consequently, far too many advisers focus only on the critical yield and the regulator has said as much.
    Originally posted by sandsy
    The standard is rubbish and as I wrote "Advisers can add to this and explain why that standard is not applicable to your circumstances".

    Unfortunately the replacement standard also looks to be rubbish, again assuming that people will have lower than historic returns and throw away half of their income potential by buying a lifetime annuity that's unlikely to be a proper match for their income need. At least they won't be required to assume that the transfer is a bad idea unless they can prove otherwise if the proposed change happens.

    Fortunately, since the pension freedoms people are allowed to completely ignore the advice if they want to and transfer anyway, so advisers who may be overly cautious about their own redress risk and hence not recommend appropriate transfers can't block transfers so easily any more.
    Last edited by jamesd; 14-09-2017 at 5:13 PM.
    • K_E_A
    • By K_E_A 14th Sep 17, 11:08 PM
    • 2 Posts
    • 0 Thanks
    K_E_A
    Yes that's what I'm really looking for. Any recommendations for reasonable advisors who won't block or refuse to transfer, because their overall advise is to stay in a DB scheme. At the end of the day, I will listen to the advise, but if it's my legal right, and if it's still my express wish to transfer, then that's what I'm looking to do, obviously signing to say that it is my decision not to take that advise.

    Some IFA/FA's stipulate on their websites, they will only carry out a transfer if they recommend it. I get they have to earn their money in fees and protect their reputations, but where is my opportunity to exercise my legal right and transfer?
    • cloud_dog
    • By cloud_dog 14th Sep 17, 11:48 PM
    • 3,170 Posts
    • 1,700 Thanks
    cloud_dog
    K_E_A, may I ask....Why such a blinkered view?
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • xylophone
    • By xylophone 15th Sep 17, 1:43 AM
    • 22,881 Posts
    • 13,243 Thanks
    xylophone
    but where is my opportunity to exercise my legal right and transfer?
    When you have taken the advice and found a scheme that will accept the transfer, even against advice.
  • jamesd
    Some IFA/FA's stipulate on their websites, they will only carry out a transfer if they recommend it. I get they have to earn their money in fees and protect their reputations, but where is my opportunity to exercise my legal right and transfer?
    Originally posted by K_E_A
    There are two parts, the advice and whether they will carry out the transfer. You can carry out the transfer yourself once you have the advice. What you want to do is ensure that whatever their advice is, they will say that you did get advice, fulfilling the DB scheme's legal obligation to ensure that you received advice.

    K_E_A, may I ask....Why such a blinkered view?
    Originally posted by cloud_dog
    I'm in a Defined Benefit Pension Scheme in the electricity industry. I'm 55 and waiting for my transfer quote. It's my intention to retire early on receipt and work part-time for myself.
    Originally posted by K_E_A
    It's not a blinkered view, it's what's required to achieve their retirement objective most efficiently.

    Even if they wanted to accept an actuarial reduction for retiring at 55, that would still be a mismatch of income provision vs income need, leaving them with a surplus income once the state pension starts and/or too little income until then.

    The transfer gets rid of that mismatch and allows arbitrary amounts of guaranteed income to be purchased either via state pension deferral or annuity buying, if there's a desire for any more guaranteed than the state pension provides.

    Unfortunately DB schemes aren't required by law to offer partial transfers as they are for full ones. Quite often a good solution could involve keeping some DB if that was available.
    • cloud_dog
    • By cloud_dog 15th Sep 17, 10:41 PM
    • 3,170 Posts
    • 1,700 Thanks
    cloud_dog
    So I'm looking for recommendations for companies/IFA's who do not insist on a positive recommendation to transfer. Not looking to make rash decisions either, but also not looking to waste time and money with those who won't/can't accommodate this from the outset.
    Originally posted by K_E_A
    As I said....a blinkered view. A view/course that is set before the availability and consideration of the facts at hand.

    Have zero issues with the OPs desired end result (good luck to him, I hope he can achieve what he needs to) but at least take the time to digest the facts and the implications.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
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