Forced to get an Financial Advisor

Your_Hero

cganesh wrote: »

To be honest, you have all frightened me, when I assumed it would be a simple procedure and I'm not going to waste money on an IFA if he's just going to say leave it in there for a while. I shall delay the decision and if Barclays go bust and I lose all my money I will die and come back to haunt you all-haha.

You really ought to read into pensions some more BEFORE you embark on transferring them around. 99 times out of 100 it is a bad idea what you were planning to do. This is why most firms insist you seek advice first so that you don't lose out on thousands of pounds and then 10 years later try to claim for compensation for them not telling you about the risks (not saying you would, but there are plenty of them about if you read some other posts).


In the unlikely event of Barclays going bust, your pension assets are ringfenced and separate from Barclays. But anyway there is something called the Pension Protection Fund for you if you are affected somehow(http://www.pensionprotectionfund.org.uk/Pages/homepage.aspx)

RichandJ

cganesh wrote: »

arghh..Richard. it does not say CETV, it says Guaranteed transfer value which incs GMP and other rights. Yes I am given 3 months to do the tfr on the amount quoted-does that help? Sorry, it is all new language to me, and I am only going on what the two companies have told me I can do.

OK, that means it does come from a final salary scheme. As previously pointed out in 99% of cases it is not a good idea to transfer out from an FS scheme.

What you need to do is have a short break from this thread, anywhere between 1 & 24 hours , then read through all pages of the transfer quote from Barclays, then come back & ask bite sized questions (what is a GMP for eg) that can be answered in isolation. Hopefully that way you'll get to a better understanding of why the Pru have requested IFA sign off.

Other things to consider letting us know, are you married or have an analogous relationship, young children (under 23), any health issues to name just a few that might affect whether a TVO may be a good idea in your case.

BTW, I'd direct any ire you have for the complexity of UK pension schemes where it belongs - the politicians for their meddling over getting on for 40 years. We're trying to help.

dunstonh

I have also looked at their annual income projection and unless I live until 100 it doesn't look very good at all.

Has it been revalued since you left? (it may not be until your retirement age). Plus, the figures would include annual indexation on retirement.

I just wanted to top up my ppp with the Barclays one to put it all in one place really and Barclays say there are no fees, and the Pru say there are no fees , so I don't understand why its such a bad idea.

To clarify what you have been told, Barclays have said they will not charge you to transfer out and Pru have said they will not charge you to transfer it in. However, Pru will charge annual fees which are around double the modern levels and that annual charge factors in the cost of you transferring it. So, there is a cost.

The reason it is a bad idea is that you will lose your GMP and chances are the critical yield to match equivalent benefits on the Barclays plan is so high that Pru have very little chance of providing that and it will almost certainly result in a lower pension in retirement.

To be honest, you have all frightened me

Good. Its probably saved you a lot of money. This is why such protections exist.

I assumed it would be a simple procedure and I'm not going to waste money on an IFA if he's just going to say leave it in there for a while.

You can get an IFA to look at it in the lead up to your retirement income decisions.

I shall delay the decision and if Barclays go bust and I lose all my money

That isnt how it works. Thankfully.

RichandJ

Your_Hero wrote: »

You really ought to read into pensions some more BEFORE you embark on transferring them around. 99 times out of 100 it is a bad idea what you were planning to do. This is why most firms insist you seek advice first so that you don't lose out on thousands of pounds and then 10 years later try to claim for compensation for them not telling you about the risks (not saying you would, but there are plenty of them about if you read some other posts).


In the unlikely event of Barclays going bust, your pension assets are ringfenced and separate from Barclays. But anyway there is something called the Pension Protection Fund for you if you are affected somehow(http://www.pensionprotectionfund.org.uk/Pages/homepage.aspx)

I always forget to mention the PPF, probably because most of the schemes I deal with are either well funded or have a strong employer covenant and good SoC to address shortfalls.

And if they do go into PPF they go to my mate in our Edinburgh office to deal with so I never see it.

cganesh

Its ok your hero, I was only joking, but you are right, I have tried to read through all of this pension stuff, and as I say it is all new to me and the more I read the more confusing it gets.(its all the terms and abbreviations I've never heard of )I probably do need an IFA but I thought this one looked straightforward to me and I'm generally quite good with finance! I thought it would be simple to join my 'pots' together which would be easier for me to make the decisions when I actually retire, which was why I became annoyed when the pru said I had to do it through the adviser. I also have a tendancy, rightly or wrongly to mistrust brokers and potentially IFAs (through past experience believe me) and don't like being forced to use one, just a gut reaction. It seems to be the general view though that transferring isn't always simple or a good idea, but I know I would rather have lump sum money than a long pension when I do have a few health issues already and I know I ain't going to live to a ripe old age. I do appreciate the advice Richard, didn't mean to sound nasty, only joking, but it was all rather negative like --oooh don't do that, don't trust them type of thing! I shall indeed check it all out before any action. Thanks guys.

lvader

Having some level of guaranteed income in retirement that isn't at the mercy of the stock markets is a great thing to have, don't give it up, it would be a huge mistake IMO.

Also the transfer value will be nothing like the true value of the pension.

PS I used to work for Barclays and have a Barclays final salary DB pension.

cganesh

Yes I may consider that, I wouldn't be blowing it all at once though a little villa somewhere hot is enticing me! (have to be very little tho)

atush

Basically the transfer value they gave you- what was it? Because 100K will only buy around 3700 of index linked pension with spousal 50% pension.

So if transfer value was say 100K, and the pension projection was 4K or more, transferring will get you less as you cannot buy better on the open market. Listen to Ivader, he knows.

But we haven't been given enough information to say more.

xylophone

Do you understand what a deferred Final Salary /Defined benefit pension is?
Do you have a scheme booklet that explains how your pension revalues in deferment?

Do you understand what a GMP is?

See here http://www.barnett-waddingham.co.uk/news/2012/07/what-is-a-gmp/

http://www.barnett-waddingham.co.uk/news/2012/07/revaluation-for-early-leavers/

cganesh

I think so, I have read it, but the more I hear the more confused I get to be honest. What they actually gave me seemed easy to understand but now after everything you've all said I'm not so convinced. Atush- its half that (50K) and the pension quote is only 500K a year which is why I assumed it wasn't such a good deal! ( A GMP is Guaranteed Minimum Pension -xylophone- but thanks for the links)