Is it possible to transfer?

jamesd

From the look of their investment change form you do have a limited set of other options. At the moment you appear to be in the Balanced Lifestyle plan.

You might want to consider instead switching to a combination of some of the others. If you just don't know what to pick, I'd go for something like 30% International Growth Fund, 30% UK Growth Fund, 30% European Growth Fund and 10% Smaller Companies Fund at the moment. Given an objective to maximise retirement income and accept short term ups and downs. If you want to reduce ups and downs the UK Property Fund is a good choice for some of the money, perhaps swapping that for smaller companies.

If it's using its normal charges it appears that this plan has total charges of 1.5% a year for the first year then 1% a year, taken monthly via fund charges that you don't see. You can get lower prices than 1% by shopping around but it's not too bad.

You can find their documents describing the plan here. Be sure to pick the stakeholder one not the standard GPP one for the relevant documents.

jamesd

I phoned Clerical Medical, which owns Scottish Widows now, on the contact phone number for the plan, 0345 603 6770 Monday to Friday 8.30am to 6pm. They told me that all of their plans offer free partial transfers out, so you will be able to transfer out all or almost all of the money while still remaining a member to get salary sacrifice benefits for your ongoing contributions.

To determine if you should, you should initially check what you're really paying, because it could be more or less than the standard level, then you can pick desired investments and seek an inexpensive place with good service that offers those investments. You should be able to get tracker funds of the types mentioned for under 0.5% including platform fees elsewhere. Any platform fees will be explicit instead of bundled into fund prices like the current plan, so don't be surprised to see a need to keep a bit of cash in a plan and sell a little to top that up occasionally.

tony4147

Thanks for your replies, I have already contacted my IFA to see what he suggests.

SallyG

Just to say - I believe SWGroup owns ClericalMedical - I got a letter from SW "explaining" that it's consolidating various companies in the SW Group into the Clerical Medical Investment Group and then subject to approval of this consolidation by the High Court -will re-name that new consolidated entity Scottish Widows Ltd on Dec 31st 2015 ................. answers on a postcard please........

dunstonh

SallyG wrote: »

Just to say - I believe SWGroup owns ClericalMedical - I got a letter from SW "explaining" that it's consolidating various companies in the SW Group into the Clerical Medical Investment Group and then subject to approval of this consolidation by the High Court -will re-name that new consolidated entity Scottish Widows Ltd on Dec 31st 2015 ................. answers on a postcard please........

CM was owned by HBOS. So, Lloyds became owner when they merged. They want to put CM and SW together. Probably to sell it off as one insurer.

jamesd

Whatever the end result is, phoning the SW number gets a hello from CM, not SW, at the moment. Not that it makes any real difference to tony4147.

tony4147 you might find it useful to discuss with your adviser the difference between volatility and risk of failing to meet your pension income targets. Lower volatility can be had by reducing income or paying in more. Higher volatility can reduce the expected cost or increase the expected income. to give you some idea, the UK stock market can be expected to have 20% drops two or three times a decade and 40% drops once or twice a decade, so that's what you'd expect in an all share mixture. If you can't deal with a 40% drop you need to add commercial property and maybe bonds to reduce the average drop level to what you can deal with. It's like a rollercoaster in reverse, upward trend but lots of dips along the way.

FatherAbraham

jamesd wrote: »

That move probably means that you told SW that your planned retirement age was 65. If you can't turn off lifestyling I suggest that you change your planned retirement age to something like 90 to prevent them from doing this. You can't really afford fifteen years or lowered investment returns.

That's really terrible advice if the OP is going to use the pension funds to purchase an annuity. Not everyone shares your idiosyncratic approach to retirement income.

Furthermore, you can't know that investment returns will be lower using lifestyling. All we can say is that the risks of a change in annuity prices will be be reduced.

Warmest regards,
FA

jamesd

It's not terrible advice if the person plans to buy an annuity. In such a case a reasonable transition period can be used. Fifteen years is unreasonably long so the best thing to do is to prevent it. If a five year period is desired it can then be set back to the target age later, once that's better known.

While nothing is guaranteed with investment returns, we do know that the lifestyling option switches money into investments that have historically had lower growth rates.

Buying more state pension and drawdown are hardly idiosyncratic. Drawdown is the most used option worldwide. The popularity of annuities in the UK is unusual, though things are moving more in the direction of global practice recently, with annuity sales dropping rapidly.

Of course, when it comes to planning, we know that Dr Ros Altmann wrote on 6 January 2015 that "I believe the best default option is the 'do nothing and assume ongoing investments' option". I agree with that view and think that it is a very sensible recognition that we left the UK world where everyone has to buy an annuity ten years ago. I hope that you would not have the view that her thoughts are idiosyncratic just because in this aspect they are similar to mine.

Similarly, The Pension Advisory Service wrote at about the same time "it is likely that a guaranteed income will form the core part of many members' retirement planning. However, with interest rates so low (and annuity rates currently poor) and annuity product ranges inflexible it is not unreasonable for members to defer purchase for some years (perhaps late 70s)". Idiosyncratic? I think not.

The difference is perhaps that I recognise that there are better options around these days than buying annuities, notably state pension deferral for a higher guaranteed inflation-linked income than that provided by annuities.

tony4147

I think I may have to get myself a new IFA. My existing one told me last year that I could not do partial transfers, it was 'all in or all out'. I have just spoken to SW who have confirmed what Jamesd has said that I can do partial transfers, the only limitation is that I can only have 10 funds.
They are forwarding me details of the available funds and histroical performance.

dunstonh

I think I may have to get myself a new IFA. My existing one told me last year that I could not do partial transfers, it was 'all in or all out'.

In most cases, that is the case. However, more recently (and in part linked to the new pension changes) providers have been more open to part transfers.

If I was given a throw away line that asked me if providers allow partial transfers then I would respond saying most do not allow it. On the other hand if I was asked the specific question by a client about their policy and what they had in mind then I would find out. So, you need to consider the context of how you asked and how it was answered.