IFA recommending I take transfer value for DB pension and invest elsewhere

jamesd

As dunstonh mentioned, this high transfer value is effectively a limited time offer. As Bank Rate increases, these transfer values will start to reduce. It's really hard to know when interest rates will go up exactly but you shouldn't be planning on more than six months to maybe a year from now if you want to transfer and get the best value. You still will be able to transfer later, it's just that the amount will be reduced compared to the exceptionally high values that are available at the moment.

downshifter98

Crikey - I have a couple of ex-employer final salary pensions which are projected at £21t ish (gross) when I'm 55 (currently 51) and I've never really given much thought to the transfer value but perhaps I should! Can I just clarify that this transfer value could potentially be transferred to me for me to invest as I choose?. I understand that fs pensions are like gold dust but I'm blown away that the op's has such a high value. It might be time to request a transfer value and find a reputable IFA.

rudebhoy

jamesd wrote: »

As dunstonh mentioned, this high transfer value is effectively a limited time offer. As Bank Rate increases, these transfer values will start to reduce. It's really hard to know when interest rates will go up exactly but you shouldn't be planning on more than six months to maybe a year from now if you want to transfer and get the best value. You still will be able to transfer later, it's just that the amount will be reduced compared to the exceptionally high values that are available at the moment.

assuming interest rates stay the same, is the transfer value likely to increase year on year?

I got a quote of 420k about 12 months ago. The most recent 480k quote means it has gone up almost 15% in a year.

the scheme allows me to get two free quotes per annum - I am going to make a point of doing that so I can track this.

rudebhoy

downshifter98 wrote: »

Crikey - I have a couple of ex-employer final salary pensions which are projected at £21t ish (gross) when I'm 55 (currently 51) and I've never really given much thought to the transfer value but perhaps I should! Can I just clarify that this transfer value could potentially be transferred to me for me to invest as I choose?. I understand that fs pensions are like gold dust but I'm blown away that the op's has such a high value. It might be time to request a transfer value and find a reputable IFA.

You can take 25% of the transfer value as a tax free lump sum. The remaining 75% needs to be invested in an approved pension scheme. I got a form which the new provider would have to complete, confirming the new scheme was either

a) an occupational pension scheme of which they were the trustees

or

b) a personal pension scheme of which they were the administrators

or

c) a buy-out policy of which they were the issuing insurance company

they also need to provide the current scheme with proof of their IRSPSS approval or HMRC registration, and their pension scheme tax reference.

I am not sure if that's just my current scheme trying to save me from being scammed, or if it is a legal requirement.

it's easy to get a quote - I just rung up them up and asked for one, it took about a week to come.

dunstonh

they also need to provide the current scheme with proof of their IRSPSS approval or HMRC registration, and their pension scheme tax reference.

I am not sure if that's just my current scheme trying to save me from being scammed, or if it is a legal requirement.

When you do pension transfers the old scheme are required to supply a range of data to the new scheme. This includes the things you mention. Often this is done through the discharge forms which have sections for the old scheme to fill in.

sandsy

rudebhoy wrote: »

assuming interest rates stay the same, is the transfer value likely to increase year on year?

I got a quote of 420k about 12 months ago. The most recent 480k quote means it has gone up almost 15% in a year.

the scheme allows me to get two free quotes per annum - I am going to make a point of doing that so I can track this.

Yes,it's worth more the closer you get to the scheme's retirement age. For example, £1000pa from next year is worth more than £1000pa only due in 20 years time.

Bootsox

sandsy wrote: »

Yes,it's worth more the closer you get to the scheme's retirement age. For example, £1000pa from next year is worth more than £1000pa only due in 20 years time.

If eventually interest rates rise and gilt prices fall, is there not a possibility that the transfer pot value will fall?