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  • FIRST POST
    • chiefie
    • By chiefie 18th Oct 16, 1:12 PM
    • 201Posts
    • 168Thanks
    chiefie
    Increase in DB transfer values
    • #1
    • 18th Oct 16, 1:12 PM
    Increase in DB transfer values 18th Oct 16 at 1:12 PM
    Hi all, just had my yearly request from one of my DB pensions. Last year it went up by 10%. This year by 29% ! Trying to work out a strategy of whether to wait another year or not ? anyone got any ideas about bonds/gilts getting still worse or is now a good time to go for it . I know it is an actuary decision but it's getting to a tipping point for me.
Page 1
    • bigadaj
    • By bigadaj 18th Oct 16, 6:28 PM
    • 7,823 Posts
    • 4,773 Thanks
    bigadaj
    • #2
    • 18th Oct 16, 6:28 PM
    • #2
    • 18th Oct 16, 6:28 PM
    Many experts think that gilt yields will fall even after they have become negative, so bizarre as it sounds it might get better yet (or worse depending on your perspective I suppose).

    However there would appear to be limited gains and the quantum of any change would be much larger with any increase in yields so might be safer to consider taking their offers in the near future.
    • Bazofts Revenge
    • By Bazofts Revenge 18th Oct 16, 10:11 PM
    • 220 Posts
    • 105 Thanks
    Bazofts Revenge
    • #3
    • 18th Oct 16, 10:11 PM
    • #3
    • 18th Oct 16, 10:11 PM
    Based on the figures you have given there I am looking forward to getting my 'Annual' DB Transfer value. I had 35% increase in 2014 and 20% last year. I am sure the natural yield is going to be much higher than what I will get offered on Early retirement.
    £66000 Cash invested in 36 companies since Feb 13
    Income to date £11999.75 Mortgage interest paid £2883.98
    Capital Growth £39000 (£7000 withdrawn)
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    • ischofie1
    • By ischofie1 18th Oct 16, 11:22 PM
    • 84 Posts
    • 53 Thanks
    ischofie1
    • #4
    • 18th Oct 16, 11:22 PM
    • #4
    • 18th Oct 16, 11:22 PM
    Current TV's seem at historical highs & for that reason alone I'd say there is more risk to the downside than upside. Obviously no one has a crystal ball but if it was me with that sort of recent increase, I'd be tempted to take what was on the table & be happy with my lot.
    • sandsy
    • By sandsy 19th Oct 16, 8:09 AM
    • 969 Posts
    • 550 Thanks
    sandsy
    • #5
    • 19th Oct 16, 8:09 AM
    • #5
    • 19th Oct 16, 8:09 AM
    Anything which means the scheme has to hold more money in order to pay out your benefits will make your CETV go up, so if it thinks equity returns will be worse, or gilt yields will be worse, or people will live longer.

    And even when all of those stay the same, for each year that you are closer to retirement age, the CETV will go up as it's closer to being paid.
    • woolly_wombat
    • By woolly_wombat 19th Oct 16, 10:33 AM
    • 365 Posts
    • 222 Thanks
    woolly_wombat
    • #6
    • 19th Oct 16, 10:33 AM
    • #6
    • 19th Oct 16, 10:33 AM
    Many experts think that gilt yields will fall even after they have become negative, so bizarre as it sounds it might get better yet (or worse depending on your perspective I suppose).
    Originally posted by bigadaj
    The opposite is happening now. Gilt yields are rising (so prices are falling):
    http://www.londonstockexchange.com/exchange/prices-and-markets/funds/chart.html?fundId=25126757&countryId=OX

    An interesting read:
    http://monevator.com/weekend-reading-when-is-an-inflation-target-not-an-inflation-target/
    • Thrugelmir
    • By Thrugelmir 19th Oct 16, 4:37 PM
    • 51,268 Posts
    • 43,078 Thanks
    Thrugelmir
    • #7
    • 19th Oct 16, 4:37 PM
    • #7
    • 19th Oct 16, 4:37 PM
    I am sure the natural yield is going to be much higher than what I will get offered on Early retirement.
    Originally posted by Bazofts Revenge
    Natural yield on what? Is it risk free?
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • bigadaj
    • By bigadaj 22nd Oct 16, 6:47 AM
    • 7,823 Posts
    • 4,773 Thanks
    bigadaj
    • #8
    • 22nd Oct 16, 6:47 AM
    • #8
    • 22nd Oct 16, 6:47 AM
    Depends on which bit of the graph you are looking at and over what period.

    The crazy thing is that yields are going negative but there is still huge demand, so potential for yields to decrease even from the super low and negative levels that currently exist, with associated potential for capital appreciation.

    Longer term there's only one way, but who knows over the short to medium term, which has existed now for much of the last decade.
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