Two real pension eye openers

woolly_wombat

greenglide wrote: »

So if they are forcing the trivial commutation lump sum on members how do they know that the members have less than £30,000 across all registered schemes?

Presumably the £15,000 was split between the OP's mother and late father and that's how they managed to get around it in this case.

Within the last few days the government have 'relaxed' the rules re taking advice on tranfers from April:
http://www.corporate-adviser.com/news-and-analysis/latest-news/db-transfer-advice-rules-relaxed/2018132.article

The government is relaxing the rules around requiring advice for DB to DC transfers, with the threshold to be applied on a per pension basis rather than on a total benefits basis.

Lord Newby said: “In response to feedback from stakeholders, we have decided that [the £30,000 threshold] should apply only to safeguarded benefits in the scheme from which the member intends to transfer, and be calculated on the basis of the cash equivalent transfer value, which is the standard measure in the industry.”

The Towers Watson article referenced by hugheskevi also contains this gem:
http://www.towerswatson.com/en-GB/Insights/Newsletters/Europe/UK-Corporate-and-Trustee-Briefing/2014/06/Budget-2014-increases-to-trivial-commutation-limits

For the small lump sums of £10,000, this is simply a case of looking at the value of the benefits in your scheme. The number of members affected will depend upon the terms which are used to convert pensions into lump sums. The less generous the terms, the larger the number of eligible members will be and the larger the savings in the scheme.

Cue more "stakeholders" downgrading values to below the £30,000 limit where financial advice is required?

Or am I just being cynical?

WW

gadgetmind

asavory wrote: »

Eye-opener no.2: There is a pensions trap here nobody is talking about. If you are expecting only a modest income from a company or personal pension, currently it's not worth it.

Yes, and this is partly behind the move to the single tier state pension. With this means testing removed, even those who only put tiny amounts aside for their old age will benefit.

Of course, the hope is that people will start planning properly for retirement and saving significant sums, but I doubt that will happen.

greenglide

Of course, the hope is that people will start planning properly for retirement and saving significant sums, but I doubt that will happen.

We can but hope!