Move pension or leave it.

geelamch

A colleauge at work is leaving after 33 years service to take up another job. He was asking if he should leave pension or investigate other options.
I said " off the top of my head he should leave it where it is ".
It is a railway final salary ( db) and he is aged 50 ,he intends to work for new company for 10 years and it is a higher salary (52k).
Does any one have any suggestions as he is considering an ifa however I think this May be unnecessary expense to be given most likely the same advice.
New jobs pension scheme does not allow transfers he believes.

Yorkie1

Final salary pensions should almost always be left where they are (the exceptions being, from what I can gather, usually linked to terminal illness).

kidmugsy

Yorkie1 wrote: »

Final salary pensions should almost always be left where they are (the exceptions being, from what I can gather, usually linked to terminal illness).

Presumably the railway pension brings a widow's pension: that can be a valuable feature if his wife is in good health, or is young, or is from a long-lived family. Similarly, if he happens to have young children it's worth his checking whether the railway pension pays dependants' pensions.

He might like to calculate whether he'd like to avoid paying higher rate income tax by contributing enough to a personal pension of some sort. Then he'd be diversifying from a final salary pension without giving up its attractions. Mind you, it must be possible to over-invest in pensions: the present also has its claims.

ukjoel

Where I used to work someone who was 50+ with 33 years into their final salary pension was waiting for the tap on the shoulder to say they could go early.

He may find that he could be able to take the full pension early during the next round of cuts as they may prefer to pension people off than make redundancies.

If I was in his boat unless it was a massive pay increase I would be staying put, and crossing my fingers that in a couple of years I could be getting the full pension paid (and working for the £52k job for a couple of years until taking full retirement.

greenglide

Where I used to work someone who was 50+ with 33 years into their final salary pension was waiting for the tap on the shoulder to say they could go early

Public sector? I work amongst a group of ex public sector staff who were outsourced and all of them expect to get redundancy at 55 or so with a huge wedge of money. The sense of right is depressing.