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  • FIRST POST
    • ChrisSargent
    • By ChrisSargent 9th Mar 17, 2:50 PM
    • 22Posts
    • 1Thanks
    ChrisSargent
    Tranferring Old Pension
    • #1
    • 9th Mar 17, 2:50 PM
    Tranferring Old Pension 9th Mar 17 at 2:50 PM
    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
Page 1
    • sandsy
    • By sandsy 9th Mar 17, 3:15 PM
    • 1,216 Posts
    • 712 Thanks
    sandsy
    • #2
    • 9th Mar 17, 3:15 PM
    • #2
    • 9th Mar 17, 3:15 PM
    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
    • By ChrisSargent 9th Mar 17, 3:33 PM
    • 22 Posts
    • 1 Thanks
    ChrisSargent
    • #3
    • 9th Mar 17, 3:33 PM
    • #3
    • 9th Mar 17, 3:33 PM
    Thanks for the quick reply.


    None of the pensions are final salary.
    Last edited by ChrisSargent; 09-03-2017 at 4:03 PM.
    • CBX1985
    • By CBX1985 9th Mar 17, 3:48 PM
    • 13 Posts
    • 10 Thanks
    CBX1985
    • #4
    • 9th Mar 17, 3:48 PM
    • #4
    • 9th Mar 17, 3:48 PM
    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
    • By ChrisSargent 9th Mar 17, 4:12 PM
    • 22 Posts
    • 1 Thanks
    ChrisSargent
    • #5
    • 9th Mar 17, 4:12 PM
    • #5
    • 9th Mar 17, 4:12 PM
    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.
    Originally posted by CBX1985

    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
    • By xylophone 9th Mar 17, 4:20 PM
    • 23,426 Posts
    • 13,622 Thanks
    xylophone
    • #6
    • 9th Mar 17, 4:20 PM
    • #6
    • 9th Mar 17, 4:20 PM
    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
    • By ChrisSargent 9th Mar 17, 4:37 PM
    • 22 Posts
    • 1 Thanks
    ChrisSargent
    • #7
    • 9th Mar 17, 4:37 PM
    • #7
    • 9th Mar 17, 4:37 PM
    There is a GMP
    • xylophone
    • By xylophone 9th Mar 17, 4:49 PM
    • 23,426 Posts
    • 13,622 Thanks
    xylophone
    • #8
    • 9th Mar 17, 4:49 PM
    • #8
    • 9th Mar 17, 4:49 PM
    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
    • By xylophone 9th Mar 17, 4:52 PM
    • 23,426 Posts
    • 13,622 Thanks
    xylophone
    • #9
    • 9th Mar 17, 4:52 PM
    • #9
    • 9th Mar 17, 4:52 PM
    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
    • By sandsy 9th Mar 17, 5:02 PM
    • 1,216 Posts
    • 712 Thanks
    sandsy
    There is a GMP
    Originally posted by ChrisSargent
    Is it a S32?
    • CBX1985
    • By CBX1985 9th Mar 17, 5:09 PM
    • 13 Posts
    • 10 Thanks
    CBX1985
    Apologies, Chris. I missed 'defined benefit' comment - doing five jobs at once

    What was the value of the GMP?
    • ChrisSargent
    • By ChrisSargent 9th Mar 17, 7:03 PM
    • 22 Posts
    • 1 Thanks
    ChrisSargent
    The quote says

    £62.40 a year

    Value of GMP £3260.00
    • xylophone
    • By xylophone 9th Mar 17, 8:57 PM
    • 23,426 Posts
    • 13,622 Thanks
    xylophone
    The quote says

    £62.40 a year
    What is this?

    Can you clarify what type of pension this is and what kind of pension your other two are? (See posts above).

    Have you obtained a new state pension statement?
    • CBX1985
    • By CBX1985 10th Mar 17, 12:29 AM
    • 13 Posts
    • 10 Thanks
    CBX1985
    Following on from my last question, it must be the GMP statement - presumably to date of leaving.

    Even if that is the case, and this is not from a new statement, as they are post 88 benefits, your GMP today is unlikely to be exceed £30,000. In which case, you would not be obliged to take advice, though you may wish to.

    In other words, you need to check whether the GMP exceeds £30,000 - if it does, you need to be advised; if it doesn't, you don't. Based on what you are being offered for an advice fee - I'm betting the latter.
    • ChrisSargent
    • By ChrisSargent 10th Mar 17, 9:14 AM
    • 22 Posts
    • 1 Thanks
    ChrisSargent
    Following on from my last question, it must be the GMP statement - presumably to date of leaving.

    Even if that is the case, and this is not from a new statement, as they are post 88 benefits, your GMP today is unlikely to be exceed £30,000. In which case, you would not be obliged to take advice, though you may wish to.

    In other words, you need to check whether the GMP exceeds £30,000 - if it does, you need to be advised; if it doesn't, you don't. Based on what you are being offered for an advice fee - I'm betting the latter.
    Originally posted by CBX1985

    The GMP doesn't exceed £30k but the transfer value is £126.5k


    I'm even more confused now than I was which I guess tells me that I do need some advice! Just need to find the £950.00 from somewhere. But I will wait until I get the transfer statements from the other 2 pensions as well and do it all in one hit.
    • dunstonh
    • By dunstonh 10th Mar 17, 9:20 AM
    • 89,561 Posts
    • 56,019 Thanks
    dunstonh
    It is not the value itself that matters. It is the value of the benefit that does. i.e. if it costs more than £30k to provide the safeguarded benefit then that is what triggers it.

    Just need to find the £950.00 from somewhere.
    It can be paid out of the pension. Indeed, that is the most tax efficient way.
    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 an Independent Financial Adviser local to you.
    • ChrisSargent
    • By ChrisSargent 10th Mar 17, 9:23 AM
    • 22 Posts
    • 1 Thanks
    ChrisSargent
    See also

    Have you obtained a new state pension statement?
    Originally posted by xylophone

    Yes I have a new state pension statement. its £155.65 a week (max benefit) - does that make a difference?


    Thanks
    • xylophone
    • By xylophone 10th Mar 17, 9:52 AM
    • 23,426 Posts
    • 13,622 Thanks
    xylophone
    does that make a difference?

    Not to the advice requirement but your forecast would have given an indication of any COPE from contracting out and whether it was possible to increase your state pension.
    • ChrisSargent
    • By ChrisSargent 13th Mar 17, 1:22 PM
    • 22 Posts
    • 1 Thanks
    ChrisSargent

    It can be paid out of the pension. Indeed, that is the most tax efficient way.
    Originally posted by dunstonh

    can you expand on this? How can it be paid from the pension? I have now found a local IFA who is doing a free first consultation and he has also hinted that costs of any further advice/meeting might be able to be paid from the pension.
    Thanks
    • JoeCrystal
    • By JoeCrystal 13th Mar 17, 1:34 PM
    • 1,292 Posts
    • 755 Thanks
    JoeCrystal
    Pretty straightforward.

    For example, when I got an IFA to review my pension fund and suggested new cheaper pension provider for it, his fee for it was taken from the pension fund once it was transferred to new provider.
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