Transferring small defined benefit pensions - help!

TechJinx

I wonder if anyone can help on this. I have two small defined benefit pensions from employers I was with for small amounts of time a while ago.

Together these are worth approximately £32,000 in transfer value and recent statements suggest they would be paying ~£2500 a year in income.

I also have a SIPP that I pay into from a limited company as I am a director. This has only been going for 17 months and has ~£36,000 in and I am paying in £2000 a month via the company.

I want to transfer the value of the defined benefits schemes into my SIPP so that I can manage them as the promised income is far smaller than the benefit to me of having the pension pot to play with.

However my existing SIPP provider (Fidelity) and every other major pension provider has refused to take the transfer without my engaging an IFA. This is not something I wish to do for such a small sum as it would not worth the associated costs.

I have read that below £30k it is fine to transfer defined benefit pensions without paid for advice. However every search I try in google simply comes up with articles on why you should keep final salary schemes. I would agree if they weren't going to pay such a small amount verses the growth potential of the transfer values in a SIPP.

Can anyone suggest a firm that will take these without insisting on advice or simply refusing. It's driving me mad!

Thanks in advance.

dunstonh

I have read that below £30k it is fine to transfer defined benefit pensions without paid for advice. However every search I try in google simply comes up with articles on why you should keep final salary schemes. I would agree if they weren't going to pay such a small amount verses the growth potential of the transfer values in a SIPP.

The issue is one of liability. Generally,defined benefit transfers are treated as mis-sales unless proven otherwise. The FOS upholds most defined benefit transfer complaints. So, most firms take the view that they should automatically reject them unless advice has been sought. After all, historically only 1 in 10 is better off transferring.

Whilst the £30k rule was brought in, it doesn't prevent companies having their own rules.

i cant help on which firms but just thought I would explain why you are having problems.

TechJinx

dunstonh wrote: »

Whilst the £30k rule was brought in, it doesn't prevent companies having their own rules.

Thanks for the thoughts

Yes - the annoying thing is I've spent quite a bit time working and thinking this one through but am not allowed to do what I want without paying of advice I don't want. :mad:

I'd happily sign a waiver!

atush

Any reason you think that taking s currently risk free option and taking on all the risk yourself is wise? After all, you could consider this 2500 guaranteed.

Have you asked your sipp provider if they will take the transfers?

TechJinx

atush wrote: »

Any reason you think that taking s currently risk free option and taking on all the risk yourself is wise? After all, you could consider this 2500 guaranteed.

Have you asked your support provider if they will take the transfers?

because say I live ~20 years from 65 - a reasonable assumption - thats £50k. In the 30 years till I retire I can easily make much more than that in a SIPP with £30k. And I can then do what I need/want to do with that money.

I'm not sure what a support provider is - I'm not in counselling
If you mean my current SIPP supplier - yes they rejected both transfers

GunJack

TechJinx wrote: »

I'm not sure what a support provider is - I'm not in counselling
If you mean my current SIPP supplier - yes they rejected both transfers

I think atush means would your SIPP provider take the transfers IF you had IFA advice, as I understand it some jus't won't take transfers at all no matter what....

TechJinx

GunJack wrote: »

I think atush means would your SIPP provider take the transfers IF you had IFA advice, as I understand it some jus't won't take transfers at all no matter what....

oh I see - I think they would not as they simply said they can't accept transfers from defined schemes.

It wouldn't matter however as once I've transferred to anyone who will take it (due diligence aside), I can then transfer that to Fidelity as it will no longer be a defined benefit scheme.

Hence my asking if anyone knew a company that would take the transfer.

jem16

TechJinx wrote: »

because say I live ~20 years from 65 - a reasonable assumption - thats £50k. In the 30 years till I retire I can easily make much more than that in a SIPP with £30k. And I can then do what I need/want to do with that money.

Presumably the £2500 is the value now? In 30 years till you retire that's also going to grow with inflation. It is also likely to be index-linked so it will be more than £50k paying out in retirement.

Have you got a spouse? Usually there would also be a spousal pension. Have you taken that into account?

TechJinx

yes it's pretty small - £800 a year or so. And thats with no tax free sum taken.

and yes - I'm aware it'll go up with inflation but so will living costs so using today's values makes sense for comparison.

All pales compared to 30 years of compounding and stock market returns.

but the main thing for me is having a total pot that I can do as I need to.

greenglide

£32,000 in transfer value and recent statements suggest they would be paying ~£2500 a year in income.

You are now saying £800 pounds a year?

TechJinx

greenglide wrote: »

You are now saying £800 pounds a year?

:undecided - no, the question was on a spouse pension - i.e. what a spouse/dependent would get if you died