BT Pension £1313.00 pa - What is fund value likely to be?

loveandlight

I have four pensions all with small amounts. I am still too young to take them yet but one of them is with BT. I asked BT to give me the transfer fund value of my pension and they wrote and told me it was worth at the moment [STRIKE]peanuts[/STRIKE] £1313.00 pa.

As I still don't know the transfer fund value I will have to ask BT on Monday for more detail.

I have another pension that has a transfer value of £29000.00 and will give me £999.00 pa. So does this mean my BT is likely to have a similar fund value do you think?

jem16

loveandlight wrote: »

I have four pensions all with small amounts. I am still too young to take them yet but one of them is with BT. I asked BT to give me the transfer fund value of my pension and they wrote and told me it was worth at the moment [STRIKE]peanuts[/STRIKE] £1313.00 pa.

As I still don't know the transfer fund value I will have to ask BT on Monday for more detail.

I have another pension that has a transfer value of £29000.00 and will give me £999.00 pa. So does this mean my BT is likely to have a similar fund value do you think?

As your BT pension sounds like a defined benefit pension, why would you want to transfer it? It would be utter madness to do so.

loveandlight

I don't want to transfer it. i just want to know how much the fund value is likely to be. I used the word transfer as i thought that was the wording to use. As you can tell I don't know much about these things.

I would still like an answer to my question though.

jem16

loveandlight wrote: »

I don't want to transfer it. i just want to know how much the fund value is likely to be.

With a final salary pension there is no such thing as a fund value as your pension is based on a defined set of benefits according to the scheme rules.

For a rough estimation it's 16 times annual pension plus lump sum if automatic.

loveandlight

Thank you jem16. i appreciate you answering my question. x

atush

or 20X w/o.

But as said, there isn't really a 'pot' in your name just a promise to pay an income.

As a side note, if you have no dependents, and are of poor health at retirement- this could be the one instance where transferring a DB pension could be looked into.

ukjoel

I think the govt calculates it as being worth 20 times the annual payment. They use this figure when working out the pension cap you can contribute over a lifetime so 26260 is the transfer value.

But as previous poster said - transferring it could be a bad idea.

To get the same benefits from a final salary pension worth 5k a year I would need to spend far more than 100k on an annuity. It would be closer to double that.

mystic_trev

Interesting discussion, always wondered how you value a Final salary pot. I had a small Pension in one of these schemes, at a Company I'd worked for, for a couple of years, a long time ago. When I asked how much it was worth for a cash transfer into my SIPP, the figure worked out at 38 times! So I transferred it

Zelazny

ukjoel wrote: »

I think the govt calculates it as being worth 20 times the annual payment. They use this figure when working out the pension cap you can contribute over a lifetime so 26260 is the transfer value.

But as previous poster said - transferring it could be a bad idea.

To get the same benefits from a final salary pension worth 5k a year I would need to spend far more than 100k on an annuity. It would be closer to double that.

The government uses 20x for the purposes of the Lifetime Allowance but that does not mean that the transfer value will match. The actual transfer value is determined according to rules laid down by the Trustees and/or the Scheme Actuary, and can vary a great deal between schemes.

FatherAbraham

loveandlight wrote: »

I asked BT to give me the transfer fund value of my pension and they wrote and told me it was worth at the moment [STRIKE]peanuts[/STRIKE] £1313.00 pa.

£1313/year is not peanuts.

What did it cost you to accrue this benefit?

The BT DB pension schemes were rather generous.

Warmest regards,
FA