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    • RADDERS
    • By RADDERS 7th Jun 17, 7:59 PM
    • 135Posts
    • 121Thanks
    RADDERS
    MetLife being recommended by IFA
    • #1
    • 7th Jun 17, 7:59 PM
    MetLife being recommended by IFA 7th Jun 17 at 7:59 PM
    Quick background, hubby has retired with a DB pension that we are managing our day to day living expenses with and I finished work with a deferred DB pension.
    I am 54 and have no intention of further work as have enough savings to draw down for any large expenses and will get my state pension at 67.
    I have been to see an IFA who has recommended the MetLife Guaranteed Income to transfer my pension to (approx £200 K) I have a very cautious attitude to risk and I understand why she has done this. If I understand it correctly as long as I do not touch the pension (which at the present time we have no need to) the capital grows at a minimum of 3% per annum and there is a daily lockout on this product. The IFA charges an initial 1.5% charge and an annual charge of 0.5% going forward and there is a charge from MetLife but I have forgotten what it was but was under 1%.

    I have googled and looked at this forum for reviews on this company but they are all a few years ago and not that flattering and I was wondering if there has been any changes to people's thoughts.
    Thanks for any advice that anyone can offer.
Page 1
    • dunstonh
    • By dunstonh 7th Jun 17, 8:17 PM
    • 88,375 Posts
    • 53,592 Thanks
    dunstonh
    • #2
    • 7th Jun 17, 8:17 PM
    • #2
    • 7th Jun 17, 8:17 PM
    Its not a great option. It has a niche but typically used by investors that don't understand investments and dont want to understand investments. i.e. they dont like how investments go up and down and cant handle the downs and want to pay for expensive safeguards.

    I'm not a fan. I also find it strange that someone would transfer out of a secure option into a risk based option only to handicap the risk based option.
    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.
    • RADDERS
    • By RADDERS 7th Jun 17, 8:29 PM
    • 135 Posts
    • 121 Thanks
    RADDERS
    • #3
    • 7th Jun 17, 8:29 PM
    • #3
    • 7th Jun 17, 8:29 PM
    Its not a great option. It has a niche but typically used by investors that don't understand investments and dont want to understand investments. i.e. they dont like how investments go up and down and cant handle the downs and want to pay for expensive safeguards.

    I'm not a fan. I also find it strange that someone would transfer out of a secure option into a risk based option only to handicap the risk based option.
    Originally posted by dunstonh
    Thanks for the prompt reply Dunstonh, the reason I am looking to transfer is that if anything happens to me before retirement age then hubby gets £2,000 per year and the return of my contributions, after retirement it is 50% so was thinking that as we are managing and hubbys pension is sufficient that the capital could be passed on in full to either hubby or kids when I pop my clogs (hopefully a while to go but you just never know), and if I understand correctly then the fund shouldn't go down.
    Thanks again
    • dunstonh
    • By dunstonh 7th Jun 17, 8:31 PM
    • 88,375 Posts
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    dunstonh
    • #4
    • 7th Jun 17, 8:31 PM
    • #4
    • 7th Jun 17, 8:31 PM
    and if I understand correctly then the fund shouldn't go down.
    And handicapped on the way up too.

    Death benefits are a valid reason for a transfer. However, what made the IFA think that you were not suited to conventional investment options?
    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.
    • RADDERS
    • By RADDERS 7th Jun 17, 8:53 PM
    • 135 Posts
    • 121 Thanks
    RADDERS
    • #5
    • 7th Jun 17, 8:53 PM
    • #5
    • 7th Jun 17, 8:53 PM
    And handicapped on the way up too.

    Death benefits are a valid reason for a transfer. However, what made the IFA think that you were not suited to conventional investment options?
    Originally posted by dunstonh
    Possibly my fault as i am terrified of the ups and downs of investments, to put it into perspective all our savings are in cash accounts 😱 😱 😱
    • Drp8713
    • By Drp8713 7th Jun 17, 9:11 PM
    • 698 Posts
    • 565 Thanks
    Drp8713
    • #6
    • 7th Jun 17, 9:11 PM
    • #6
    • 7th Jun 17, 9:11 PM
    Why not keep the DB pension and buy some life insurance then?
    • dunstonh
    • By dunstonh 7th Jun 17, 10:34 PM
    • 88,375 Posts
    • 53,592 Thanks
    dunstonh
    • #7
    • 7th Jun 17, 10:34 PM
    • #7
    • 7th Jun 17, 10:34 PM
    Possibly my fault as i am terrified of the ups and downs of investments, to put it into perspective all our savings are in cash accounts �� �� ��
    Your fear of investment risk means you are suffering inflation risk and shortfall risk. Risks that are more likely to cause a lower outcome than investments.
    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.
    • xylophone
    • By xylophone 7th Jun 17, 11:19 PM
    • 22,054 Posts
    • 12,719 Thanks
    xylophone
    • #8
    • 7th Jun 17, 11:19 PM
    • #8
    • 7th Jun 17, 11:19 PM
    will get my state pension at 67.
    Have you and your spouse both obtained new state pension statements?

    https://www.gov.uk/check-state-pension

    Your deferred pension is revaluing in deferment - when you left were you given a statement of deferred benefits showing the pre 88/post 88 GMP and excess?

    If you wish to transfer out, why not to your SIPP?
    • RADDERS
    • By RADDERS 7th Jun 17, 11:38 PM
    • 135 Posts
    • 121 Thanks
    RADDERS
    • #9
    • 7th Jun 17, 11:38 PM
    • #9
    • 7th Jun 17, 11:38 PM
    Have you and your spouse both obtained new state pension statements?

    https://www.gov.uk/check-state-pension

    Your deferred pension is revaluing in deferment - when you left were you given a statement of deferred benefits showing the pre 88/post 88 GMP and excess?

    If you wish to transfer out, why not to your SIPP?
    Originally posted by xylophone
    Yes both have latest state pension forecasts, both contracted out, I am 5 years short, hubby is 7 years short.
    Yes got a statement but I didn't join the scheme until 89 so no worries there.
    I have only got the SIPP that I opened with HL to put my last years salary into, and it is held in cash at the moment - I know 😱
    Thanks
    • xylophone
    • By xylophone 8th Jun 17, 8:41 AM
    • 22,054 Posts
    • 12,719 Thanks
    xylophone
    I didn't join the scheme until 89 so no worries there.
    Then you have a post 88 GMP shown on your statement of benefits at leaving?
    Last edited by xylophone; 08-06-2017 at 2:18 PM. Reason: typo
    • RADDERS
    • By RADDERS 8th Jun 17, 10:24 AM
    • 135 Posts
    • 121 Thanks
    RADDERS
    The you have a post 88 GMP shown on your statement of benefits at leaving?
    Originally posted by xylophone
    Post GMP is only £340
    • xylophone
    • By xylophone 8th Jun 17, 1:13 PM
    • 22,054 Posts
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    xylophone
    Post GMP is only £340
    But revaluing in deferment by fixed or full rate.

    https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/
    • MatthewAinsworth
    • By MatthewAinsworth 8th Jun 17, 1:22 PM
    • 2,717 Posts
    • 1,086 Thanks
    MatthewAinsworth
    I misread the post as McLife, I thought McDonald's was doing finance!
    • xylophone
    • By xylophone 8th Jun 17, 2:09 PM
    • 22,054 Posts
    • 12,719 Thanks
    xylophone
    I misread the post as McLife, I thought McDonald's was doing finance!
    Anything Ford can do Mac can do better?
    • RADDERS
    • By RADDERS 8th Jun 17, 2:41 PM
    • 135 Posts
    • 121 Thanks
    RADDERS
    Originally posted by xylophone
    Just double checked my paperwork and it is £340 per annum, increasing before retirement 4.75% after retirement 5%
    Thanks again for any assistance
    • Malthusian
    • By Malthusian 8th Jun 17, 2:53 PM
    • 2,423 Posts
    • 3,383 Thanks
    Malthusian
    If I understand it correctly as long as I do not touch the pension (which at the present time we have no need to) the capital grows at a minimum of 3% per annum and there is a daily lockout on this product.
    If you don't touch the pension then 3% is a dire rate of return.

    For the up to 1.2% per annum MetLife charge for guarantees a woman aged 54 in good health could purchase guaranteed whole of life insurance of 77% of the investment, which barring an unprecedented stock market catastrophe will give you better security than MetLife will.

    The best you can say about MetLife is that if an adviser has tried to convince you that investment risk is a good thing, and been forced to admit defeat, by recommending one he avoids the risk that you complain when the stockmarket falls, and he also avoids the risk that you complain that he should have tried to convince you harder after you realise how much money you've lost by letting inflation eat away your savings. But there are much better solutions no matter what the problem is.
    • RADDERS
    • By RADDERS 9th Jun 17, 11:16 AM
    • 135 Posts
    • 121 Thanks
    RADDERS
    Thanks for all the helpful advice, I guess it's back to the IFA then and see what else she can recommend.
    Cheers Radders
    • xylophone
    • By xylophone 9th Jun 17, 11:31 AM
    • 22,054 Posts
    • 12,719 Thanks
    xylophone
    Just double checked my paperwork and it is £340 per annum, increasing before retirement 4.75% after retirement 5%
    You have a statement showing post 88 GMP and excess.
    It seems that your GMP is revaluing in deferment by Fixed Rate and the excess by scheme/statutory rules - see

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

    GMP age for a female is still 60,

    In payment, your Scheme has to index link the GMP portion up to 3% CPI and the excess according to scheme rules - what does your scheme booklet say about index linking the excess in payment? Is it CPI/RPI/ up to a maximum of 5% regardless of whether inflation is higher?

    Your IFA should be able to tell you.
    • RADDERS
    • By RADDERS 9th Jun 17, 11:53 AM
    • 135 Posts
    • 121 Thanks
    RADDERS
    You have a statement showing post 88 GMP and excess.
    It seems that your GMP is revaluing in deferment by Fixed Rate and the excess by scheme/statutory rules - see

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

    GMP age for a female is still 60,

    In payment, your Scheme has to index link the GMP portion up to 3% CPI and the excess according to scheme rules - what does your scheme booklet say about index linking the excess in payment? Is it CPI/RPI/ up to a maximum of 5% regardless of whether inflation is higher?

    Your IFA should be able to tell you.
    Originally posted by xylophone
    CPI upto a maximum of 2.5% post 1997 and CPI upto a maximum of 5% for the other before retirement.
    LPI to a maximum of 5% after retirement for everything.
    I have the paperwork but isn't that easy to understand lol
    • bostonerimus
    • By bostonerimus 9th Jun 17, 11:59 AM
    • 514 Posts
    • 252 Thanks
    bostonerimus
    Thanks for all the helpful advice, I guess it's back to the IFA then and see what else she can recommend.
    Cheers Radders
    Originally posted by RADDERS
    Fire the IFA. You received bad advice once so don't compound the mistake. If you want to avoid risk then the DB pension sounds just right. Is your DB pension index linked? Have you compared the internal rate of return of the DB plan and the MetLife option (including all fees) for an average lifespan.

    I't doesn't sound as if your husband will be in financial difficulty if you pre-decease him, but if you are worried about that I like the option of buying some straight no frills life insurance.

    You said you have savings.....how are they invested?
    Last edited by bostonerimus; 09-06-2017 at 12:06 PM.
    Misanthrope in search of similar for mutual loathing
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