GMP - Can I opt out?

dunstonh

I left my employer in 1988, and handed over control of the fund to the Pru in 1989. The Pru have quoted a GMP figure of around 7,500.00 per annum, and say that will not increase

That would be a pre 88 and the increases are paid via the state pension. If you give up the GMP then you lose the indexation via the state pension.

At your withdrawal rate of around 6%, you are likely to find yourself better off in early years but worse off in later years compared to the GMP. Plus, you will be replacing a guaranteed option with one that is subject to investment risk and with such a high withdrawal figure, one that is likely to be subject to pound cost ravaging leading to capital erosion and quite possibly running out.

xylophone

That would be a pre 88 and the increases are paid via the state pension. If you give up the GMP then you lose the indexation via the state pension.

He needs to check the figure for pre 97 ASP against his COD - it is possible that if fixed rate has been used by the Pru, the COD will be greater than the ASP so that no increase will be received until one balances the other.

Michael_Walker

I can feel myself sinking out of my depth at this point I've no idea what a 'notional ASP' is, just for starters...still, it does reinforce my need for decent professional advice and I'm glad to have had both my original enquiries answered so fully and knowledgeably. Does still look to me as if deciding what to do involves taking a punt on my life expectancy! Thanks once again to all.

PS - No, I haven't claimed my pension yet - should I? It's not due for another 2 and a half months.

xylophone

https://www.gov.uk/state-pension/how-to-claim

Have you considered deferring it? https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/372517/dwp024-102014.pdf


https://forums.moneysavingexpert.com/discussion/comment/60319901#Comment_60319901

Have a look at post 18.


See also https://forums.moneysavingexpert.com/discussion/4532605 post 12

See also the case of poster howy 22 where the DWP/HMRC made an error in calculating his GMP/COD as though it had been revalued at fixed rate - post 21 onwards.

https://forums.moneysavingexpert.com/discussion/4532605

Michael_Walker

Thanks very much for the references. I think I'm now getting a slightly better handle on all this. But there seem so many variables and 'ifs' and 'buts' associated with this that I'm going to need professional advice. Just hope I pick someone who knows his/her stuff! I must say, getting advice or info from the Pru has been like pulling teeth so far. Maybe the person I spoke to was just having a bad day, but it seems that if you know the right questions to ask, they'll tell you, but if not, you're sunk!

dunstonh

I must say, getting advice or info from the Pru has been like pulling teeth so far.

That is because they are not authorised or regulated to give advice. They have to go out of their way to avoid saying anything that could be viewed as advice or opinion.

it seems that if you know the right questions to ask, they'll tell you, but if not, you're sunk!

That is the regulatory system we have. If they were found to offer a hint of advice then, in the case of a complaint, the FOS can class it as an advised case and that gives liability that they would have little chance of defending.

xylophone

Just hope I pick someone who knows his/her stuff!

Just hope you can find an adviser...:)

http://citywire.co.uk/new-model-adviser/news/fca-cracks-down-on-pension-transfers-as-ifas-avoid-angst/a813411

http://www.fca.org.uk/firms/financial-services-products/investments/pension-transfers

https://www.unbiased.co.uk/

xylophone

Let us know how you get on in the end - and don't forget to check out the state pension information!