Railway pension Vs Private Norwich Union

bow74

I have a Railways pension, which I am told is pretty good as they go. My question is, I also have a private one with Norwich union from previous employment.
Is it worth my while to transfer my Norwich union one into my Railway pension. I have been told my people in work it is??

shaunrc

Hi bow

There are a few questions that need to be asked first before anyone can help you.

1. You need to tell us more about the railway pension. Is it what is called final salary? If it is then it will promise you a certain income level when you retire rather than having a fund value.

2. Who is offering you the pension ( as in what company)?

3. On what terms would you be able to switch?

This will give me a guide to offer some suggestions

standinman2009

if its a british railways pension its very good .i have a br pension and we got a 5% pay rise in april as compared to 0% with most others

dunstonh

standinman2009 wrote: »

if its a british railways pension its very good .i have a br pension and we got a 5% pay rise in april as compared to 0% with most others

There is more than one BR scheme. They have a defined benefit and a defined contribution scheme.

bow74

Hello again
here goes with some answers
yes it is a fixed salary pension.
It is a pension with the railway pension people, I think it is a reminant of the old BR days. I currently work for a sub contractor to network rail ( Amey)

EdInvestor

If you think you might want to retire early,bear in mind that the BR pension may have a later NRD and you could thus lose flexibility.If you are not married it may also not be such a good deal for you.

bow74

EdInvestor wrote: »

If you think you might want to retire early,bear in mind that the BR pension may have a later NRD and you could thus lose flexibility.If you are not married it may also not be such a good deal for you.

In what way ???
I can understand not being able to retire at 60 ( who will be in 2031)
but what different does married make. Which I am as it goes ??

EdInvestor

Final salary pensions usually include spouse and dependants pensions along with generous death benefits which you pay for, but a single person won't use. It is thus much easier for a single to match the benefits of the f/s pension via direct investment. Index linking is another expensive add on you will pay for whether you like it or not.

marklv

EdInvestor wrote: »

Final salary pensions usually include spouse and dependants pensions along with generous death benefits which you pay for, but a single person won't use. It is thus much easier for a single to match the benefits of the f/s pension via direct investment. Index linking is another expensive add on you will pay for whether you like it or not.

Well, most people get married sooner or later, so the dependant pension is very useful in this repect. And index linking may be expensive, but it preserves the value of the pension against inflation. Flat rate pension payments would lose around 25% of their value every 10 years assuming a yearly inflation of around 3%.

EdInvestor

marklv wrote: »

Well, most people get married sooner or later

Not these days they don't, married people are in the minority.

Index linking is great if it's free, expensive if it isn't and not ideal for those who won't live very long.It is better for people to have a choice.

Also f/s pensions tend to be very inflexible on retirement ages.

They were designed back in the days when people lived much more conventional lives.

marklv

EdInvestor wrote: »

Not these days they don't, married people are in the minority.

Sorry - I don't believe this at all. Most people aged 40 or above are married. The booming dating agency market is evidence that most people still want to get married.

EdInvestor wrote: »

Index linking is great if it's free, expensive if it isn't and not ideal for those who won't live very long. It is better for people to have a choice.

I agree. But there are halfway house solutions like 'with profits' annuities, 3% fixed increase annuities etc. It's not just a straight choice between index linked and level.

EdInvestor wrote: »

Also f/s pensions tend to be very inflexible on retirement ages.

They were designed back in the days when people lived much more conventional lives.

Well, I'm conventional and very happy with my public sector final salary scheme, which allows me to retire at 60 (the official retirement age) or work until 65 if I want to and collect a higher pension.

I think you are speaking from the point of view of an IFA trying to sell his wares.