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local Authority DB frozen in 1996

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Comments

  • Anyway thanks again to all. It seems the consensus is to leave it alone so I will have a good hard think before making a decision. I am only 4 years away from 60 when I could get the lump sum anyway. It seems there are so many possible permutations which would allow me to pay more in to a private pension. I cant top this one up at all. My basic reasons for considering it initially was triggered by a letter from Portal Financial comparing the paying down of debt with after tax salary or paying debt off with a tax free lump sum then paying into a scheme with tax relief. just seemed to make sense
  • hyubh
    hyubh Posts: 3,744 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Not talking of giving it up just taking 25% tax free now.

    It is 'giving it up' because the only way 'take 25%' before 60 will be to transfer out completely to a DC arrangement, then take 25% of whatever value the new pension is.
    My basic reasons for considering it initially was triggered by a letter from Portal Financial comparing the paying down of debt with after tax salary or paying debt off with a tax free lump sum then paying into a scheme with tax relief.

    I see their website heavily uses marketing terms like 'pension release' and 'pension unlocking'; however, even their MD when he's managed to get a quote in the Telegraph only talks of 'expensive debts ... Say you are paying interest at 15pc to 20pc on a credit card, or 10pc to 12pc on a business loan'. Neither apply in your case.

    http://www.telegraph.co.uk/finance/personalfinance/9907354/How-your-pension-could-pay-off-your-debts.html
  • dunstonh
    dunstonh Posts: 120,201 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    o dunstonh..thank you for your comments.. cannot understand the last one though...I believe the choice IS mine even if I have to pay some so called "independent financial advisor" over the odds to sort it.

    If a financial adviser gives the most likely recommendation, which is to say you should not transfer it then you are likely stuffed paying a bill and getting no transfer agreed.
    Surely £86'000 invested in a private pension and topped up over 10 years will give a reasonable return.

    But not as good as the pension you have.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • jem16
    jem16 Posts: 19,731 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    The transfer value is £116000 approx. The last statement said my current pension was £5600 (I'm just 56) and it would not normally be payable until I'm 60. Survivors pension currently £2800. Retirement grant of £16800.

    So let's look at those figures.

    £116,000 take off your lump sum of £16,800 leaves £99,200. If you used that to buy exactly the same index-linked pension with 50% spouse benefit it would give an annual pension of £2976.

    Yet your statement shows £5600 at age 60.

    Do you think you could grow the £116,000 by enough in 5 years?
  • Thanks Jem...presume that's an annuity which can be index linked.


    Seems whether I like it or not there will be much thought required to justify a transfer. I suppose I thought pension freedom meant I could choose to suit my own circumstances and wishes.
  • System
    System Posts: 178,374 Community Admin
    10,000 Posts Photogenic Name Dropper
    Hi

    You can start a private sector pension and/or AVC etc if you wish.
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com

  • Seems whether I like it or not there will be much thought required to justify a transfer. I suppose I thought pension freedom meant I could choose to suit my own circumstances and wishes.

    Yes pension freedom does offer choice, but fortunately there are checks and balances in place to prevent people from inadvertently acting against their own long term best interests.

    WW
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    edited 15 April 2015 at 10:38PM
    You plan to give up pension rights that would grow at 4%p.a., roughly, to pay off a mortgage that charges 2.6% p.a.

    Do you see why the commenters think you're being a chump?
    Free the dunston one next time too.
  • johndough wrote: »
    Hi

    You can start a private sector pension and/or AVC etc if you wish.



    Sorry whats an AVC


    Also don't think this one is guaranteed 4% growth just inflation linked.


    Did find out today though that pays out 5 times annual pension on my death AND then pays out widows pension
  • AlanP_2
    AlanP_2 Posts: 3,539 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Sorry whats an AVC


    Also don't think this one is guaranteed 4% growth just inflation linked.


    Did find out today though that pays out 5 times annual pension on my death AND then pays out widows pension

    AVC = Additional Voluntary Contribution, like a Personal Pension but usually linked with a DB scheme.

    The death benefits & spouse pension are potentially (but hopefully not for a few years yet) very worthwhile aspects of some DB schemes.
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