Mum can't get her full pension pot even though she hasn't taken anything

xylophone

Another thought, does the CETV of £150,000 relate solely to the 1964 DB Scheme?

Was your mother contributing to Afterwork (a DC scheme?) from 2010 so that there is in addition a "pot" to be valued?

audi321

hyubh wrote: »

Your phrase 'local authority schemes like NHS, Teachers, Police,' makes no sense whatsoever - 'local authority schemes' (i.e., the LGPS) are exempt from the upcoming ban since they're 'funded' as a private sector DB scheme is. For sure a ban may come to be put in place for DB schemes in general, in which case 'local authority schemes' would fall into line, however that is neither government nor opposition policy at present.

Sorry my mistake, when I said local authority schemes, I meant public sector pension schemes......you know what I meant come on!

audi321

xylophone wrote: »

We learned almost more than we wanted to know about The Barclays Pension Scheme, Towers Watson and Uncle Tom Cobley and all.......

Wet towel round the head time.........:rotfl:

Ok, I haven't seen this before....be gentle!

However, I've only got to post 2 (Yours) and noticed you've made a mistake already in that the Barclays scheme does not revalue GMP at Fixed rate. They have used a combination of Fixed and Full methods.

Apologies if you later correct yourself in the forthcoming 10 pages!

audi321

jem16 wrote: »

Out of interest, as an IFA, would you be advising the OP's mother to go down the drawdown route or the enhanced annuity route?

With your job you obviously know what you are doing and drawdown would be very suitable for you.

However here we have an OP with 10/11 months investment experience who apparently has made 32% in that time and assumes (from the sound of it) that this will happen every year and it's easy to do. I would hazard a guess that the OP has never experienced any sort of stockmarket downturn and doesn't realise that the 32% profit in one year could soon turn into a 60% loss in another year.

We also have the OP's mother (whose pension pot it is) and father in bad health who have been offered a 7.5% annuity (the terms of which have never been clarified here despite numerous requests - is it joint/single, level or index-linked) which is just totally dismissed. The OP's mother (nor father) does not have the experience to manage a drawdown pot and could possibly run out of money.

The transfer value also seems to go between £180k and then £150k and as yet has not been clarified which it is.

What would you, as an IFA, do if these people came to you for advice?

I don't believe we have been given enough information relating to the existing 1964 benefits to be able to advise whether or not it would be beneficial to transfer out.

Also, I would need to run the figures to see what impaired life annuity she may be entitled to before I could recommend on drawdown v annuity.

However, suffice to say, if she has made 32% in a few months, she has been a) Lucky! and b) extremely unlikely to replicate this over the next few months!

buckster

Xylophone, my mother does have a smaller pension with Barclays but it has nothing to do with the transfer value of the 1964 and I haven't included it in any of the figures I have given.

The problem is moving the 1964 pension to a drawdown but after discussing it with another adviser today it looks like my mum has got a good deal,at a third of the price of the original IFA. Hopefully the wheels will start turning this week as they have told her it will take at least 8 weeks

audi321

woolly_wombat wrote: »

Presumably the RPI-indexation accounts for the tremendous increase in CETV?

WW

I don't believe there is anything other than low gilt yields which account for the tremendous increases.

i.e. the actuaries have to calculate how much they need at NRD to provide me with my estimated indexed up pension. They reverse calculate how much they need to give me this income using 15 year gilt yields which (if I were allowed to provide a link which I'm not - being a new user) are at an all time low - There is almost a direct link between the increase in my CETV and the decline in 15 year gilts.

Thrugelmir

buckster wrote: »

That £135k would not be frozen over 12 years, the pot would be invested and investments grow. It would not be unheard of for an investment of £135k to more than double in 12 years and this is why the annuity companies have ripped people off for years with terrible returns.

I fear that peoples expectations of share returns in the post April 2015 era are overly optimistic. In the past few months Tesco, Standard Chartered, HSBC and Centrica all core income stocks have had difficulties of one kind or another. I doubt that they are going to be the last once the main 2014 reporting season is past over in the coming weeks.

buckster

audi321 wrote: »

I don't believe we have been given enough information relating to the existing 1964 benefits to be able to advise whether or not it would be beneficial to transfer out.

Also, I would need to run the figures to see what impaired life annuity she may be entitled to before I could recommend on drawdown v annuity.

However, suffice to say, if she has made 32% in a few months, she has been a) Lucky! and b) extremely unlikely to replicate this over the next few months!

She hasn't made 32%, I have this year and I am a he! Lol I would be crazy to think I will make this every year and I haven't said I would. I gamble and I jump in and out of investments quite a lot. so far it has worked out great but I know before I retire I will lose at some point. I am not kidding myself.

The question was never " should she annuitise or drawdown" so I am not asking this. She has already decided that she wants drawdown.

audi321

buckster wrote: »

Xylophone, my mother does have a smaller pension with Barclays but it has nothing to do with the transfer value of the 1964 and I haven't included it in any of the figures I have given.

The problem is moving the 1964 pension to a drawdown but after discussing it with another adviser today it looks like my mum has got a good deal,at a third of the price of the original IFA. Hopefully the wheels will start turning this week as they have told her it will take at least 8 weeks

Seriously, if you are determined this is the way forward, don't pay an IFA (I would charge 3% (£4500)). Just speak with Standard Life (I can provide you with a contact person/number in their SIPP department) - I have no connection with him other than he knows his stuff and dealt with my transfer.

This will get the transfer done and held in cash until she is ready to make the drawdown crystallisation and then make any investment decisions.

buckster

Thanks Audi, please PM me the contact. I love saving money but I would love to save my mum money even more so thanks for the offer